Template-Type: ReDIF-Article 1.0
Author-Name: Aulia Fuad Rahman
Author-Workplace-Name: Faculty of Economics and Business, Universitas Brawijaya, Indonesia
Author-Name: Mohamat Sabri Hassan
Author-Workplace-Name: School of Accounting, Faculty of Economics and Management,Universiti Kebangsaan Malaysia, 43600 Bangi Selangor, Malaysia
Author-Email: sabri1@ukm.my
Author-Name: Norman Mohd Saleh
Author-Workplace-Name: School of Accounting, Faculty of Economics and Management,Universiti Kebangsaan Malaysia, 43600 Bangi Selangor, Malaysia
Author-Name: Zaleha Abdul Shukor
Author-Workplace-Name: School of Accounting, Faculty of Economics and Management,Universiti Kebangsaan Malaysia, 43600 Bangi Selangor, Malaysia
Title: The Effect of Underinvestment on the Relationship between Earnings Management and Information Asymmetry
Abstract: Earnings management is often investigated from the opportunistic perspective and rarely from the informational perspective. This study investigates earnings management from the informational perspective by incorporating underinvestment as a moderating variable in the relationship between earnings management and information asymmetry. A panel data regression analysis on firms listed on the Main Board of Bursa Malaysia reveals that earnings management reduces information asymmetry. We also provide evidence that underinvestment moderates the relationship between earnings management and information asymmetry. This finding suggests that earnings management among underinvesting firms reduces information asymmetry. Therefore, underinvestment motivates managers to convey informational earnings management.
Classification-JEL:
Keywords: informational earnings management, opportunistic earnings management, information asymmetry, underinvestment, Malaysia
Journal: Asian Academy of Management Journal of Accounting and Finance
Pages: 1-28
Volume: 9
Issue: 2
Year: 2013
File-URL: http://web.usm.my/journal/aamjaf/vol 9-2-2013/AAMJAF 9-2-art 1 (1-28)-edited.pdf
File-Format: Application/pdf
Handle: RePEc:usm:journl:aamjaf00902_1-28