Int. J. of Trade and Global Markets   »   2017 Vol.10, No.1



Title: The effect of corporate strategy on earnings management


Author: Ali Muktiyanto


Address: Accounting Department, Faculty of Economics, Universitas Terbuka, Tangerang Selatan, Indonesia


Abstract: Accrual models related to EM have been variously criticised for being biased and producing discretionary and noisy estimates. This study aims to investigate the influence of corporate strategy on earnings management (EM). Through Revenue Models modified from Stubben (2010) - expenses models and accrual models - it is shown that the strategy orientation has an influence on earnings management behaviour. In particular, the exercise based on revenue models and accrual Dechow-Dichev models has demonstrated that companies driven by innovation are more likely to succeed at EM, whereas the application of expenses models, Jones accrual models, as well as the modified Jones models has suggested that companies with a stronger orientation towards efficiency companies also tend to engage in EM.


Keywords: earnings management; corporate strategy; revenue modelling; expenses models; accrual models; innovation.


DOI: 10.1504/IJTGM.2017.10002791


Int. J. of Trade and Global Markets, 2017 Vol.10, No.1, pp.37 - 46


Available online: 19 Feb 2017



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