Determinants of earnings management of listed firms in the food industry on the Ho Chi Minh City Stock Exchange.

Abstract

The research is conducted to identify factors affecting earnings management on the audited financial statements of 223 observations from 34 listed companies in the food industry on the Ho Chi Minh City Stock Exchange (HOSE) from 2007 to 2019 using multiple regression models. We use Jones’s (1991) model, modified by Kothari et al. (2005) to measure earnings management. The results show that firms with consolidated financial statements and higher financial leverage have  higher levels of earnings manipulation. In contrast, smaller firms have lower earnings management. The findings have implications for government authorities and investors in assessing the quality of firms’ reported earnings.