The Impact of Corporate Social Responsibilities on Earnings Management: Evidence from Vietnam

• Autores: Ngo Phuong Nhat Diem, Le Tuan Hiep
• Localización: International Journal of Professional Business Review: Int. J. Prof.Bus. Rev., ISSN 2525-3654, ISSN-e 2525-3654, Vol. 8, Nº. 2, 2023
• Idioma: inglés
• DOI: 10.26668/businessreview/2023.v8i2.1065
• Enlaces
  • Texto completo (pdf)
• Resumen

  • Purpose:  This study aims to assess whether listed companies comply with regulations on social responsibility disclosure and the regulatory role of CEO power impact earnings management.

      Theoretical framework:  corporate social responsibility (CSR) has become a decisive factor in business performance and is consequential to the sustainable existence of enterprises in the world's competitive environment (Buckingham, 2012; Mark, 2012; Yinyoung et al., 2016; Enric, 2018) and also a concern in the context of many concerns about social and environmental issues.

      Design/methodology/approach: The study uses a data sample of 418 companies listed on the two stock exchanges HOSE and HNX in the period 2016 - 2020 through the method of general feasible least squares (FGLS) to measure the impact of corporate social responsibility and the impact of social responsibility with the regulation of CEO power on earnings management.

      Findings: This empirical evidence has provided reliable evidence to help listed companies have the incentive to comply with regulations on CSR disclosure to increase their prestige and attract investment.

      Research, Practical & Social implications: The research results admit that companies that comply with regulations on CSR disclosure have limited profit management, and in the case of influential executives, the impact of CSR on profit management is more substantial.

      Originality/value: the study only examines the impact of CSR combined with CEO power, so it is not possible to have an overview of the CEO's impact on the implementation of corporate CSR on EM and CSR in the regulation of corporate governance to EM. Therefore, this is the author's future research direction when considering this issue.

• Referencias bibliográficas
  • Alasiri, N., & AlKubaisy, Z. (2022). Exploring the role of leadership, work environment, alignment and company performance on the digital...
  • Alzoubi, E. S. (2018). Audit quality, debt financing, and earnings management: Evidence from Jordan. Journal of International Accounting,...
  • Aier, J., Comprix, J., & Gunlock, M. (2005). The financial expertise of CFOs and accounting restatements. The Accounting Horizons, 19(4),...
  • Buckingham, G. P. (2012). The effect of corporate social responsibility on the financial performance of listed companies in the UK. https://ethos.bl.uk/OrderDetails.do?did=1&uin=uk.bl.ethos.579943
  • Barua, A., Davidson, L. F., Rama, D. V., & Thiruvadi, S. (2010). CFO gender and accruals quality. Accounting Horizons, 24(1), 25-39.
  • Beck, N., & Katz, J. N. (1995). What to do (and not to do) with time-series cross-section data. American political science review, 89(3),...
  • Ben Amar, A., & Chakroun, S. (2018). Do dimensions of corporate social responsibility affect earnings management?: Evidence from France....
  • Bernard, Y., Godard, L., & Zouaoui, M. (2018). The effect of CEOs' turnover on the corporate sustainability performance of French...
  • Carroll, A. B. (1979). A three-dimensional conceptual model of corporate performance chapter view project Wiley encyclopedia of management...
  • Carroll, A. B. (1999). Corporate social responsibility evolution of a definitional construct. Business and Society, 38(3), 268-296.
  • Cavaco, S., & Crifo, P. (2014). CSR and financial performance: complementarity between environmental, social and business behaviors. Applied...
  • Chapple, W., & Moon, J. (2005). Corporate social responsibility (CSR) in Asia: A seven-country study of CSR website reporting. Business...
  • Chatterjee, A., & Hambrick, D. C. (2007). It's all about me: narcissistic chief executive officers and their effects on company strategy...
  • Chen, W., Zhou, G., & Zhu, X. (2019). CEO tenure and corporate social responsibility performance. Journal of Business Research, 95(4),...
  • Chen, T. (2011). Analysis of accrual-based models in detecting earnings management analysis on accrual-based models in detecting. Lingnan...
  • Chih, H. L., Shen, C. H., & Kang, F. C. (2008). Corporate social responsibility, investor protection, and earnings management: Some international...
  • Chin, M. K., Hambrick, D. C., & Treviño, L. K. (2013). Political ideologies of CEOs: The influence of executives' values on corporate...
  • Cho, E., & Chun, S. (2016). Corporate social responsibility, real activities earnings management, and corporate governance: evidence from...
  • Choe, C., Dey, T., & Mishra, V. (2014). Corporate diversification, executive compensation, and firm value: Evidence from Australia. Australian...
  • Dechow, P. M., Sloan, R. G., & Sweeny, A. P. (1995). Detecting earnings management: A new approach. The Accounting Review, 70(2), 193-225.
  • Dechow, P., & Skinner, D. J. (2000). Earnings management: reconciling the views of accounting academics, practitioners, and regulators....
  • Dechow, P. M., & Dichev, I. D. (2002). The quality of accruals and earnings: The role of accrual estimation errors. The Accounting Review,...
  • Dhaliwal, D., Li, O. Z., Tsang, A., & Yang, Y. G. (2014). Corporate social responsibility disclosure and the cost of equity capital: The...
  • Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: concepts, evidence, and implications. The Academy of...
  • Enric, H. K. (2018). The relationship between CSR and performance: Evidence in China. Pacific-Basin Finance Journal, 51(4), 155-170.
  • Elkington, J. (1997). Enter the Triple Bottom Line Reporting: Looking for Balance, Australian CPA69: 18-21.
  • Feng, M., Ge, W., Luo, S., & Shevlin, T., (2011). Why do CFOs become involved in material accounting manipulations? Annual Conference...
  • Friedman, M. (1970). The Social Responsibility of Business is to Increase its Profits The New York Times Magazine.
  • García-Sánchez, I. M., Aibar-Guzmán, B., Aibar-Guzmán, C., & Azevedo, T. C. (2020). CEO ability and sustainability disclosures: The mediating...
  • Gras-Gil, E., Palacios Manzano, M., & Hernández Fernández, J. (2016). Investigating the relationship between corporate social responsibility...
  • Grougiou, V., Leventis, S., Dedoulis, E., & Owusu-Ansah, S. (2014). Corporate social responsibility and earnings management in US banks....
  • Hambrick, D. C. (2007). Upper echelon theory: An update. The Academy of Management Review, 32(2), 334-343. https://doi.org/10.2307/ 20159303.
  • Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: the organization as a reflection of its top managers. The Academy of Management...
  • Hemingway, C. A., & Maclagan, P. W. (2004). Managers' personal values as drivers of corporate social responsibility. Journal of Business...
  • Jackson, S. B., & Liu, X. K. (2010). The allowance for uncollectible accounts, conservatism, and earnings management. Journal of Accounting...
  • Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. American Economic Review, 76(2), 35-47. http://papers.ssrn.com/abstract=99580.
  • Jensen, M. C. (2001). Book Review. European Financial Management, 7(3), 297-317. https://doi.org/10.2307/3094840.
  • Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial...
  • Jones, J. J. (1991). Earnings Management During Import Relief Investigations. Journal of Accounting Research, 29(2), 193-228.
  • Jones, T. M. (1995). Instrumental stakeholder theory: A synthesis of ethics and economics. Academy of Management Review, 20(2), 404-437. https://doi.org/10.5465/amr.1995.9507312924.
  • Kim, J. B., & Sohn, B. C. (2013). Real earnings management and cost of capital. Journal of Accounting and Public Policy, 32(6), 518-543....
  • Kim, S. H., Udawatte, P., & Yin, J. (2019). The effects of corporate social responsibility on real and accrual-based earnings management:...
  • Kim, Y., Park, M. S., & Wier, B. (2012). Is earnings quality associated with corporate social responsibility? Accounting Review, 87(3),...
  • Kothari, S., Leone, A. J., & Wasley, C. E. (2005). Performance-matched discretionary accrual measures. Journal of Accounting and Economics,...
  • Le, H. T., Kweh, Q. L., Ting, I. W., & Nourani, M. (2020). CEO power and earnings management: Dual roles of foreign shareholders in Vietnamese...
  • Liu, H., & Lee, H. A. (2019). The effect of corporate social responsibility on earnings management and tax avoidance in Chinese listed...
  • Mark, A. C. (2012). Creating shared value through strategic CSR in Tourism. https://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.566474.
  • McWilliams, A., Siegel, D. S., & Wright, P. M. (2006). Corporate social responsibility: Strategic implications. Journal of Management...
  • Orij, R. P., Rehman, S., Khan, H., & Khan, F. (2021). Is CSR the new competitive environment for CEOs? The association between CEO turnover,...
  • Pham, V. (2012). Researching a model to identify the earnings management of companies listed on the Ho Chi Minh Stock Exchange. Economic Development...
  • Phillips, R., Freeman, R. E., & Wicks, A. C. (2003). What stakeholder theory is not. Business Ethics Quarterly, 13(4), 479-502.
  • Puriwat, W., & Tripopsakul, S. (2022). Understanding digital social responsibility in the social media context: Evidence from Thailand....
  • Rashid, A., Shams, S., Bose, S., & Khan, H. (2020). CEO power and corporate social responsibility (CSR) disclosure: does stakeholder influence...
  • Sanders, W. G., & Carpenter, M. A. (1998) Internationalization and firm governance: the roles of CEO compensation, top team composition,...
  • Sun, N., Salama, A., Hussainey, K., & Habbash, M. (2010). Corporate environmental disclosure, corporate governance, and earnings management....
  • Tang, Y., Qian, C., Chen, G., & Shen, R. (2015). How CEO hubris affects corporate social irresponsibility. Strategic Management Journal,...
  • Waldman, D. A., & Siegel, D. (2008). Defining the socially responsible leader. The Leadership Quarterly, 19(1), 117-131. https://doi.org/10....
  • Wernicke, G., Sajko, M., & Boone, C. (2021). How much influence do CEOs have on company actions and outcomes? The example of corporate...
  • Yinyoung, R., Manisha, S., & Yoon, K. (2016). CSR and financial performance: The role of CSR awareness in the restaurant industry. International...