Investors perception to earnings management: Evidence from Malaysia

Authors

Keywords:

Earnings Management, Firm Value, Bursa Malaysia, Investor Perception

Abstract

This study examines the effect of earnings management on firm value from investors’ perspectives in the Malaysian market. Using panel data from 26 non-financial firms listed on the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) between 2018 and 2022, discretionary accruals estimated through the Modified Jones Model represent earnings management, while Tobin’s Q measures firm value. Multiple regression results reveal a significant negative relationship between earnings management and firm value, indicating that investors view such practices as signals of reduced transparency and weak governance. Return on assets and leverage positively influence firm value, whereas firm size and age exert negative effects. These findings suggest that investors in Malaysia are sensitive to earnings quality and penalize opportunistic reporting behavior. The study contributes empirical evidence from an emerging market context under Malaysia’s evolving corporate governance framework.

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Published

2024-06-06

How to Cite

Eddine, Z. S., & Khaled, S. (2024). Investors perception to earnings management: Evidence from Malaysia. International Journal of Economic Perspectives, 18(6), 1047–1062. Retrieved from http://www.ijeponline.org/index.php/journal/article/view/1255

Issue

Vol. 18 No. 6 (2024)

Section

Peer Review Articles
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Copyright (c) 2024 Zeroual Sif Eddine, Salouda Khaled

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