Earnings management indicators and their impact on inventory turnover under food, beverage and tobacco sector: A thorough study using simultaneous equations model

College

Ramon V. Del Rosario College of Business

Department/Unit

Accountancy

Document Type

Article

Source Title

Academy of Accounting and Financial Studies Journal

Volume

20

Issue

2

First Page

93

Last Page

103

Publication Date

1-1-2016

Abstract

The scope of the study's sample size dwells on publicly listed firms that are engaged in food, beverage, and tobacco business. As for the computation of discretionary accruals, the extent of the study lies in the Modified Jones model. The point of analysis is also limited to the extent of literature that the researchers have gathered, in which the same, deemed as relevant for this paper. The statistical analyses that the researchers did are (1) regression analysis to derive the amount of discretionary accruals per firm, (2) panel data analysis to assess the impact and relationship of the FS variables to discretionary accruals and discretionary accruals to inventory turnover ratio, and (3) simultaneous equations model to assess the impact and relationship identified in the determining earnings management to the inventory turnover ratio. The samples that were used in this study include the companies listed in the Osiris database. The study focused on food, beverage, and tobacco industry. Data were captured from their published financial statement.

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