Relationship between company characteristics and earnings management: A study of listed companies on HOSE

Abstract

This study attempts to examine the relationship between the practice of earnings management and specific characteristics of a company among listed firms on Hochiminh Stock Exchange (HOSE). In particular, Firm size, Leverage, Sales growth and Profitability are expected to have an impact on earnings manipulation. The modified Jones model (1995) is applied to measure earnings management while the data of independent variables is obtained form financial statements of 228 companies listed on HOSE during the period of 2010 – 2012. Firm size and Sales growth are proved to have significant positive relationships with earnings management. It means that this behavior is more likely in larger firms, higher growth rate. In the meanwhile, there is not enough evidence to prove for such association between two other independent variables and earnings manipulation.