THE EFFECT OF EARNINGS MANAGEMENT ON FINANCIAL PERFORMANCE /
EVIDENCE FROM NON-FINANCIAL INSTITUTIONS LISTED IN THE JOHANNESBURG STOCK MARKET
SAMUEL NYAKEMAH BROWN JR; SUPERVISOR: ASSOC. PROF. DR. ASIL AZİMLİ
- ix, 48 sheets; 31 cm. Includes CD
Thesis (MSc) - Cyprus International University. Institute of Graduate Studies and Research Accounting and Finance Department
Includes bibliography (sheets 39-48)
ABSTRACT The study aimed to find the effect of earnings management on the financial performance of firms listed on the Johannesburg Stock Exchange. The study used discretionary accruals to present earnings management. The modified Jones model was used to determine the discretionary accruals by the firms. The study used 64 non-financial institution firms listed on the Johannesburg stock market between 2007 and 2022. The purposive sampling strategy was used to select all the firms due to the unavailability of data for some firms. The study used fixed and random effect models to estimate the effect of discretionary accruals on financial performance. The Hausman specification tests were used to decide between the random and fixed effect models and determine which was best. According to the study, DACC has a detrimental and statistically significant effect on ROA and ROE. The study discovered that while the firm's leverage has a favorable and statistically significant effect on ROE, it has a statistically insignificant impact on ROA. The study discovered that the firm's size negatively impacts ROA and ROE. The study discovered that increasing sales has a favorable impact on ROA and ROE. According to the study, ROA and ROE are positively and statistically significantly impacted by the firms' financial innovation. The study discovered that the mediating effects of financial innovation and DACC positively impact ROA and ROE. Keywords: Discretionary Accruals, Earnings Management, Financial Innovation Johannesburg Stock Market, Leverage