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Examining Managerial Misbehavior in Asian Banks through Loan Loss Provisions*☆

Examining Managerial Misbehavior in Asian Banks through Loan Loss Provisions*☆ This paper reviews the impact of corporate ownership concentration, insider ownership, and the development of regulatory and financial systems on the opportunistic behavior of managers to alter financial reporting. By using the panel data technique with a sample of banks from 25 Asian countries, the major findings indicate that ownership concentration as well as insider ownership positively impact the banks’ accrual‐based earnings management. Results also reveal that an improvement in regulatory and financial systems restricts executives’ capacity to manage earnings. Islamic banking and IFRS adoption reduce the manipulation of earnings. Policy implications from the results are also discussed. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asia-Pacific Journal of Financial Studies Wiley

Examining Managerial Misbehavior in Asian Banks through Loan Loss Provisions*☆

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Publisher
Wiley
Copyright
Copyright © 2020 Korean Securities Association
ISSN
2041-9945
eISSN
2041-6156
DOI
10.1111/ajfs.12307
Publisher site
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Abstract

This paper reviews the impact of corporate ownership concentration, insider ownership, and the development of regulatory and financial systems on the opportunistic behavior of managers to alter financial reporting. By using the panel data technique with a sample of banks from 25 Asian countries, the major findings indicate that ownership concentration as well as insider ownership positively impact the banks’ accrual‐based earnings management. Results also reveal that an improvement in regulatory and financial systems restricts executives’ capacity to manage earnings. Islamic banking and IFRS adoption reduce the manipulation of earnings. Policy implications from the results are also discussed.

Journal

Asia-Pacific Journal of Financial Studies – Wiley

Published: Aug 1, 2020

Keywords: ; ; ; ; ;

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