| dc.description.abstract | Purpose: The study aims to detect earnings manipulation practices, if any, and
to investigate the relationship between company-specific characteristics and
earnings management in the power sector of Bangladesh.
Methodology: In this study, a panel dataset comprising data from annual
reports of 22 power sector companies listed in the DSE was utilized. The dataset
spanned seven consecutive years, from 2014 to 2020. To identify earnings
manipulation practices, the researchers employed the Beneish M-Score model.
Findings: The results of this study indicate that approximately 30% of the Fuel
& Power sector companies listed in Bangladesh engage in information
manipulation. Moreover, it was found that 64% of these manipulators received
an unqualified opinion from auditors. Among the 22 selected power companies,
18 exhibited significantly higher M-Scores for at least one year during the
period of 2014-202. Regression analysis shows that accrual quality has a
significant positive association with earnings management, while the firm size
and audit quality are negatively related to earnings manipulation. However, firm
age and audit opinion did not demonstrate any significant influence on earnings
management.
Originality/Value: This study marks the pioneering use of the Beneish MScore model in the Fuel & Power sector of Bangladesh to detect earnings
management practices. The findings suggest that having more non-cash items in
the income statement allows management to manipulate, and large firms with
strong corporate governance are less likely to manipulate information. These
findings are valuable for decision-makers and stakeholders such as investors,
policymakers, and the government.
Limitations: Only one sector has been chosen for investigation in this study.
Selecting more samples from each industry could give a broader picture of
earnings manipulation practices by the companies in Bangladesh. | en_US |
