Logo PTI Logo icrmat

Proceedings of the 2021 International Conference on Research in Management & Technovation

Annals of Computer Science and Information Systems, Volume 28

The impact of CG on the earnings quality of enterprises listed on the stock market in Vietnam

, ,

DOI: http://dx.doi.org/10.15439/2021KM31

Citation: Proceedings of the 2021 International Conference on Research in Management & Technovation, Vu Dinh Khoa, Shivani Agarwal, Gloria Jeanette Rincon Aponte, Nguyen Thi Hong Nga, Vijender Kumar Solanki, Ewa Ziemba (eds). ACSIS, Vol. 28, pages 327331 ()

Full text

Abstract. The paper examines the influence of corporate governance (CG) on the earnings quality (EQ) of listed companies in Vietnam. We consider the issue of CG integrated from each component of the board and the supervisory board using the GLS regression. The data are collected at energy enterprises listed on the Vietnam stock market in 2010 - 2018, with 2162 observations. The research results have found that the board positively impacts the EQ, while the supervisory board does not affect the earnings quality. Besides the audit quality, the ratio of liabilities positively affects the EQ; in contrast to the percentage of state ownership, the company's size has an opposite effect. In addition, foreign ownership ratio, profitability do not affect the EQ. The empirical research results are a valuable basis to help companies improve the EQ, thereby helping companies consider the elements of the board and supervisory more effectively for each company


  1. Abdul Rahman, R., & Haneem Mohamed Ali, F. (2006). Board, audit committee, culture and earnings management: Malaysian evidence. Managerial Auditing Journal, 21(7), 783-804. http://dx.doi.org/https://doi.org/10.1108/02686900610680549
  2. Abed, S., Al-Attar, A., & Suwaidan, M. (2012). CG and earnings management: Jordanian evidence. International business research, 5(1), 216-225. http://dx.doi.org/doi:10.5539/ibr.v5n1p216
  3. Ahmed, S. (2014). Board of director characteristics and earnings management in Malaysia. GSTF Journal on Business Review (GBR), 2(4), 94-99. http://dx.doi.org/DOI: 10.5176/2010-4804_2.4.255
  4. Al-Othman, L. N., & Al-Zoubi, M. N. (2019). The Impact of BD Characteristics on Earnings Quality of Listed Industrial Companies on the Amman Stock Exchange. Academy of Accounting and Financial Studies Journal, 23(1), 1-16.
  5. Alves, S. (2014). The effect of board independence on the earnings quality: evidence from portuguese listed companies. Australasian Accounting, Business and Finance Journal, 8(3), 23-44. http://dx.doi.org/http://dx.doi.org/10.14453/aabfj.v8i3.3
  6. Aygun, M., Ic, S., & Sayim, M. (2014). The Effects of corporate ownership structure and board size on earnings management: Evidence from Turkey. International Journal of Business and Management, 9(12), 123-132. http://dx.doi.org/doi:10.5539/ijbm.v9n12p123
  7. Ball, R., & Shivakumar, L. (2005). Earnings quality in UK private firms: comparative loss recognition timeliness. Journal of accounting and economics, 39(1), 83-128. http://dx.doi.org/https://doi.org/10.1016/j.jacceco.2004.04.001
  8. Carcello, J. V., Hollingsworth, C. W., Klein, A., & Neal, T. L. (2006). Audit committee financial expertise, competing CG mechanisms, and earnings management. Available at SSRN: https://ssrn.com/abstract=887512 or. http://dx.doi.org/http://dx.doi.org/10.2139/ssrn.887512
  9. Chaharsoughi, M. T., & Rahman, R. A. (2013). CG and earnings quality: the experience of listed companies in Iran. Journal of Modern Accounting and Auditing, 9(6), 790-797.
  10. Chalaki, P., Didar, H., & Riahinezhad, M. (2012). CG attributes and financial reporting quality: Empirical evidence from Iran. International Journal of Business and Social Science, 3(15), 223-229.
  11. Dang, H. N., Nguyen, T. T. C., & Tran, D. M. (2020). The Impact of Earnings Quality on Firm Value: The Case of Vietnam. The Journal of Asian Finance, Economics and Business (JAFEB), 7(3), 63-72.
  12. Dang, H. N., Pham, C. D., Nguyen, T. X., & Nguyen, H. T. T. (2020). Effects of CG and Earning Quality on Listed Vietnamese Firm Value. The Journal of Asian Finance, Economics and Business (JAFEB), 7(4), 71-80.
  13. Dang, H. N., & Tran, D. M. (2019). Relationship between Accrual Anomaly and Stock Return: The Case of Vietnam. The Journal of Asian Finance, Economics and Business, 6(4), 19-26.
  14. Dang Ngoc, H., Truong Thanh, H., Van Thuy, V. T., Nguyen Thi Thanh, L., Hoang Thi Viet, H., Nguyen Thi Lan, A., & Nguyen Thi Hong, N. (2020). Accounting Conservatism and Cash Dividend Policy of Enterprises in Vietnam. Paper presented at the IFCAA 2020, Ha Noi, VietNam.
  15. Dechow, P., 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. http://dx.doi.org/https://doi.org/10.1016/j.jacceco.2010.09.001
  16. Dechow, P. M., & Dichev, I. D. (2002). The quality of accruals and earnings: The role of accrual estimation errors. The Accounting Review, 77(s-1), 35-59. http://dx.doi.org/https://doi.org/10.2308/accr.2002.77.s-1.35
  17. Dechow, P. M., Kothari, S. P., & Watts, R. L. (1998). The relation between earnings and cash flows. Journal of accounting and economics, 25(2), 133-168. http://dx.doi.org/https://doi.org/10.1016/S0165-4101(98)00020-2
  18. Ebrahim, A. (2007). Earnings management and board activity: an additional evidence. Review of Accounting and Finance, 6(1), 42-58. http://dx.doi.org/https://doi.org/10.1108/14757700710725458
  19. Epstein, B. J., & Jermakowicz, E. K. (2008). IFRS Policies and Procedures: John Wiley & Sons.
  20. Essa, S., Kabir, R., & Nguyen, H. T. (2016). Does CG affect earnings management? Evidence from Vietnam. Paper presented at the Vietnam symposium in Banking and Finance (VSBF).
  21. Finkelstein, S., & D'aveni, R. A. (1994). CEO duality as a double-edged sword: How boards of directors balance entrenchment avoidance and unity of command. Academy of management Journal, 37(5), 1079-1108. http://dx.doi.org/https://doi.org/10.5465/256667
  22. Gulzar, M. A. (2011). CG characteristics and earnings management: Empirical evidence from Chinese listed firms. International Journal of Accounting and Financial Reporting, 1(1), 133-151. http://dx.doi.org/DOI: 10.5296/ijafr.v1i1.854
  23. Ha, H. T. V., Van, V. T. T., & Hung, D. N. (2019). Impact of Social Reponsibility Information Disclosure on the Financial Performance of Enterprises in Vietnam. Indian Journal of Finance, 13(1), 20-36. http://dx.doi.org/10.17010/ijf/2019/v13i1/141017
  24. Hashim, H. A., & Devi, S. (2008). Board characteristics, ownership structure and earnings quality: Malaysian evidence. Research in Accounting in Emerging Economies, 8(97), 97-123. http://dx.doi.org/https://doi.org/10.1016/S1479-3563(08)08004-3
  25. Hassan, S. U., & Ahmed, A. (2012). CG, earnings management and financial performance: A case of Nigerian manufacturing firms. American International Journal of Contemporary Research, 2(7), 214-226.
  26. Hassan, S. U., & Bello, A. (2013). Firm characteristics and financial reporting quality of listed manufacturing firms in Nigeria. International Journal of Accounting, Banking and Management, 1(6), 47-63.
  27. Hoang, T. C., Abeysekera, I., & Ma, S. (2018). Board diversity and corporate social disclosure: evidence from Vietnam. Journal of Business Ethics, 151(3), 833-852. http://dx.doi.org/https://doi.org/10.1007/s10551-016-3260-1
  28. Hung, D. N., & Van, V. T. T. (2020a). Researching the Firm Characteristics Affecting the Earnings Quality: The Case of Vietnam. Calitatea, 21(179), 106-112.
  29. Hung, D. N., & Van, V. T. T. (2020b). Studying the impacts of earnings quality on stock return: Experiments in Vietnam. International Journal of Advanced and Applied Sciences, 7, 45-53.
  30. Kang, H. H., & Liu, S. B. (2014). Corporate social responsibility and corporate performance: a quantile regression approach. Quality & Quantity, 48(6), 3311-3325.
  31. Kang, S.-A., & Kim, Y.-S. (2012). Effect of CG on real activity-based earnings management: Evidence from Korea. Journal of Business Economics and Management, 13(1), 29-52. http://dx.doi.org/doi:10.3846/16111699.2011.620164
  32. Klein, A. (2002). Audit committee, board of director characteristics, and earnings management. Journal of accounting and economics, 33(3), 375-400.
  33. Mackenzie, B., Coetsee, D., Njikizana, T., Chamboko, R., Colyvas, B., & Hanekom, B. (2012). Wiley IFRS 2013: Interpretation and Application of International Financial Reporting Standards: John Wiley & Sons.
  34. Marrakchi Chtourou, S., Bedard, J., & Courteau, L. (2001). CG and earnings management. Available at SSRN: https://ssrn.com/abstract=275053 1-35. http://dx.doi.org/http://dx.doi.org/10.2139/ssrn.275053
  35. Murhadi, W. R. (2011). Good CG and earning management practices: An Indonesian cases. Jurnal Manajemen, 10(2), 143-155.
  36. Park, Y. W., & Shin, H.-H. (2004). Board composition and earnings management in Canada. Journal of Corporate Finance, 10(3), 431-457.
  37. Peasnell, K. V., Pope, P. F., & Young, S. (2005). Board monitoring and earnings management: Do outside directors influence abnormal accruals? Journal of Business Finance & Accounting, 32(7-8), 1311-1346.
  38. Qinghua, W., Pingxin, W., & Junming, Y. (2007). Audit committee, board characteristics and quality of fi nancial reporting: An empirical research on Chinese securities market. Frontiers of Business Research in China, 1(3), 385-400.
  39. Radzi, S., Islam, M. A., & Ibrahim, S. (2011). Earning quality in public listed companies: A study on Malaysia exchange for securities dealing and automated quotation. International Journal of Economics and Finance, 3(2), 233-244.
  40. Rahmani, S., & Akbari, M. A. (2013). Impact of firm size and capital structure on earnings management: evidence from Iran. World of Sciences Journal, 1(17), 59-71.
  41. Saleh, N. M., Iskandar, T. M., & Rahmat, M. M. (2005). Earnings management and board characteristics: Evidence from Malaysia. Jurnal Pengurusan (UKM Journal of Management), 24.
  42. Soliman, M. M., & Ragab, A. A. (2014). Audit committee effectiveness, audit quality and earnings management: an empirical study of the listed companies in Egypt. Research Journal of Finance and Accounting, 5(2), 155-166.
  43. Van Khanh, V. T., & Hung, D. N. (2020). Impact of Earnings Quality on the Debt Maturity: The Case of Vietnam. Asian Economic and Financial Review, 10(1), 1-12.
  44. Van Linh, N., Hung, D. N., Dang, T. B., Van, V. T. T., & Anh, N. T. M. (2019). The Effects of Business Efficiency to Disclose Information of Sustainable Development: The Case of Vietnam. Asian Economic and Financial Review, 9(4), 547-558.
  45. Waweru, N. M., & Riro, G. K. (2013). CG, firm characteristics and earnings management in an emerging economy. Journal of Applied Management Accounting Research, 11(1), 43-64.
  46. Xie, B., Davidson, W. N., & DaDalt, P. J. (2003). Earnings management and CG: the role of the board and the audit committee. Journal of Corporate Finance, 9(3), 295-316.