2,354
Views
0
CrossRef citations to date
0
Altmetric
ACCOUNTING, CORPORATE GOVERNANCE & BUSINESS ETHICS

Business strategy typologies and the preference of earnings management practices: Evidence from Indonesian listed firms

ORCID Icon, & ORCID Icon
Article: 2161204 | Received 14 Jun 2022, Accepted 16 Dec 2022, Published online: 28 Dec 2022

References

  • Ashbaugh-Skaife, H., Collins, D. W., & Kinney, W. R. (2007). The discovery and reporting of internal control deficiencies prior to SOX-mandated audits. Journal of Accounting and Economics, 44(1–2), 166–18.
  • Ashbaugh-Skaife, H., Collins, D. W., Kinney, W. R., & Lafond, R. (2008). The effect of SOX internal control deficiencies and their remediation on accrual quality. The Accounting Review, 83(1), 217–250.
  • Badertscher, B. A. (2011). Overvaluation and the choice of alternative earnings management mechanisms. The Accounting Review, 86(5), 1491–1518.
  • Ballas, A., Naoum, V. C., & Vlismas, O. (2020). The Effect of strategy on the asymmetric cost behavior of SG&A expenses. European Accounting Review, 1–39. https://doi.org/10.1080/09638180.2020.1813601
  • Balsam, S., Krishnan, J., & Yang, J. S. (2003). Auditor industry specialization and earnings quality. Auditing: A Journal of Practice & Theory, 22(2), 71–97.
  • Barton, J., & Simko, P. J. (2002). The balance sheet as an earnings management constraint. The Accounting Review, 77(s–1), 1–27.
  • Bentley-Goode, K. A., Newton, N. J., & Thompson, A. M. (2017). Business strategy, internal control over financial reporting, and audit reporting quality. Auditing: A Journal of Practice & Theory, 36(4), 49–69.
  • Bentley, K. A., Omer, T. C., & Sharp, N. Y. (2013). Business strategy, financial reporting irregularities, and audit effort. Contemporary Accounting Research, 30(2), 780–817.
  • Beyer, B. D., Nabar, S. M., & Rapley, E. T. (2018). Real earnings management by benchmark-beating firms: Implications for future profitability. Accounting Horizons, 32(4), 59–84.
  • Bhojraj, S., Hribar, P., Picconi, M., & Mcinnis, J. (2009). Making sense of cents: An examination of firms that marginally miss or beat analyst forecasts. The Journal of Finance, LXIV(5), 2361–2388.
  • Burnett, B. M., Martin, G. W., Mcallister, B. P., & McAllister, B. P. (2012). Audit quality and the trade-off between accretive stock repurchases and accrual-based earnings management. The Accounting Review, 87(6), 1861–1884.
  • Chen, Y., Eshleman, J. D., & Soileau, J. S. (2017). Business strategy and auditor reporting. Auditing: A Journal of Practice & Theory, 36(2), 63–86.
  • Chenhall, R. H. (2003). Management control systems design within its organizational context: findings from contingency-based research and directions for the future. Accounting, Organizations and Society, 28(2–3), 127–168.
  • Chi, W., Lisic, L. L., & Pevzner, M. (2011). Is enhanced audit quality associated with greater real earnings management?. Accounting Horizons, 25(2), 315–335.
  • Cohen, D. A., Dey, A., & Lys, T. Z. (2008). Real and accrual based earnings management in the pre- and post- Sarbanes-Oxley periods. The Accounting Review, 83(3), 757–787. https://www.jstor.org/stable/30244500
  • Cohen, D. A., & Zarowin, P. (2010). Accrual-based and real earnings management activities around seasoned equity offerings. Journal of Accounting and Economics, 50(1), 2–19.
  • Davila, T. (2000). An empirical study on the drivers of management control systems’ design in new product development. Accounting, Organization and Society, 25(4–5), 383–409.
  • Dechow, P. M., Ge, W., & Schrand, C. (2010). Understanding earnings quality: A review of the proxies, their determinants and their consequences. Journal of Accounting and Economics, 50(2–3), 344–401. https://doi.org/10.1016/j.jacceco.2010.09.001
  • Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1995). Detecting earnings management. The Accounting Review, 70(2), 193–225. https://www.jstor.org/stable/248303
  • Doyle, J., Ge, W., & McVay, S. (2007a). Determinants of weaknesses in internal control over financial reporting. Journal of Accounting and Economics, 44(1–2), 193–223.
  • Doyle, J. T., Ge, W., & Mcvay, S. (2007b). Accrual quality and internal control over financial reporting. The Accounting Review, 82(5), 1141–1170.
  • Fasipe, O., & Sun, H. (2020). Real activities manipulation in stock-for-stock mergers. Journal of Economics and Finance, 44(3), 570–586. https://link.springer.com/article/10.1007/s12197-019-09500-9
  • Gul, F. A., Fung, S. Y. K., & Jaggi, B. (2009). Earning quality: some evidence on the role of auditor tenure and auditors’ industry expertise. Journal of Accounting and Economics, 47(3), 265–287.
  • Gunny, K. A. (2010). The relation between earnings management using real activities manipulation and future performance: Evidence from meeting earnings benchmarks. Contemporary Accounting Research, 27(3), 855–888.
  • Hambrick, D. (1983). Some tests of the effectiveness functional attributes of Miles and Snow’s strategic types. Management, 26(1), 5–26.
  • Hennes, K. M., Leone, A. J., & Miller, B. P. (2008). The importance of distinguishing errors from irregularities in restatement research: The case of restatements and CEO/CFO turnover. The Accounting Review, 83(6), 1487–1519.
  • Higgins, D., Omer, T. C., & Phillips, J. D. (2015). The influence of a firm’s business strategy on its tax aggressiveness. Contemporary Accounting Research, 32(2), 674–702.
  • Ittner, L. R. (1997). The choice of performance measure in annual bonus contract. The Accounting Review, 72(2), 231–255.
  • Jarvinen, T., & Myllymaki, E. R. (2016). Real earnings management before and after reporting SOX 404 material weaknesses. Accounting Horizons, 30(1), 119–141. https://doi.org/10.2308/acch-51310
  • Kim, Y., & Park, M. S. (2014). Real activities manipulation and auditors’ client-retention decisions. The Accounting Review, 89(1), 367–401.
  • Kothari, S. P., Laguerre, T., & Leone, A. (2002). Capitalization versus expensing: evidence on the uncertainty of future earnings from capital expenses versus R&D outlays. Review of Accounting Studies, 7(4), 355–382.
  • Kothari, S. P., Leone, A. J., & Wasley, C. E. (2005). Performance Matched Discretionary Accrual Measures. Journal of Accounting and Economics, 39(1), 163–197.
  • Langfield-Smith, K. I. M. (1997). Management control systems and strategy: a critical review. Accounting, Organizations and Society, 22(2), 207–232.
  • Li, Y., Li, X., Djajadikerta, H. G., & Geri Djajadikerta, H. (2020). Financial distress, internal control, and earnings management: Evidence from China. Journal of Contemporary Accounting and Economics, 16(3), 100210.
  • Martinez, A. L, & Ferreira, B. A. (2019). Business strategy and tax aggressiveness in Brazil. Journal of Strategy and Management, 12(4), 522–535.
  • Miles, R. E., & Snow, C. C. 1978. The influence of a firm’s business strategy on its tax aggressiveness. Contemporary Accounting Research, 32(2)674–702, Organizational strategy, structure, and process. New York: McGraw-Hill, cited in Higgins, D., Omer, T.C. & Phillips, J.D. (2015). https://doi.org/10.1111/1911-3846.12087
  • Miles, R. E., & Snow, C. C. 2003. The influence of a firm’s business strategy on its tax aggressiveness. Contemporary Accounting Research, 32(2)674–702, Organizational strategy, structure, and process. Stanford, CA: Stanford University Press, cited in Higgins, D., Omer, T.C. & Phillips, J.D. (2015). https://doi.org/10.1111/1911-3846.12087
  • Parnell, J. A., & Wright, P. (1993). Generic strategy and performance: an empirical test of the miles and snow typology. British Journal of Management, 4(1), 29–36.
  • Petersen, M. A. (2009). Estimating standard errors in finance panel data sets: comparing approaches. Review of Financial Studies, 22(1), 435–480.
  • Porter, M. E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. New York: The Free Press.
  • Rahman, M. J., Jia, L., & Sultana, R. (2021). Business strategy and systematic risk: Evidence from China. Journal of Corporate Accounting & Finance, 1–19. https://doi.org/10.1002/jcaf.22514
  • Rajagopalan, N. (1997). Strategic orientations, incentive plan adoptions, and firm performance: evidence from electric utility firms. Strategic Management Journal, 18(10), 761–785.
  • Roychowdhury, S. (2006). Earnings management through real activities manipulation. Journal of Accounting and Economics, 42(3), 335–370.
  • Simons, R. (1987). Accounting control systems and business strategy: An empirical analysis. Accounting, Organizations and Society, 12(4), 357–374.
  • Tucker, J. W., & Zarowin, P. A. (2006). Does income smoothing improve earnings informativeness?. The Accounting Review, 81(1), 251–270.
  • Vorst, P. (2016). Real earnings management and long-term operating performance: the role of reversals in discretionary investment cuts. The Accounting Review, 91(4), 1219–1256.
  • Wu, P., Gao, L., Gu, T., & Yuanhui Li, Prof. John Ferguson, P. (2015). Business strategy, market competition and earnings management evidence from China. Chinese Management Studies, 9(3), 401–442.
  • Xu, R. Z., Taylor, G. K., & Dugan, M. T. (2007). Review of real earnings management literature. Journal of Accounting Review, 26, 195–228. https://doi.org/10.4236/me.2020.113046
  • Zamani, S., Parnell, J. A., Labbaf, H., & O’Regan, N. (2013). Strategic change and decision making in an emerging nation: an explanatory assessment of Iranian manufacturing firms. Strategic Change, 22(355), 370. https://doi.org/10.1002/jsc.1945
  • Zang, A. Y. (2012). Evidence on the trade-off between real activities manipulation and accrual-based earnings management. The Accounting Review, 87(2), 675–703.