Influence of Financial Ratios on Earnings Management: Evidence from Vietnam Stock Exchange Market

Nguyen Thanh Cuong, Nguyen Thi Thanh Ha

Abstract


This paper examines the influence of financial ratios on the earnings management of listed companies in Vietnam. This study uses the sample of 320 non-financial corporations listed in Vietnam stock exchange market for the period of 2008–2016. The results of the FEM (fixed effects model) show that return on asset, cash flow from operation ratio, asset growth ratio, total assets turnover, and current ratio have significant influence on the earnings management of listed companies in Vietnam. In addition, the influence on the earnings management of two control variables - which are firm’s size and age – are also proven. The results of this study may help the auditors to assess the risk of misstatement due to earnings management. At the same time, financial auditors will be able to identify corporate earnings adjustment behavior through financial ratios to make sound decisions.


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Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.