Author/Authors :
Rahman، Aulia Fuad نويسنده Faculty of Economics and Business, Universitas Brawijaya , , Hassan، Mohamat Sabri نويسنده School of Accounting, Faculty of Economics and Management, Universiti Kebangsaan Malaysia , , Mohd Saleh، Norman نويسنده School of Accounting, Faculty of Economics and Management, Universiti Kebangsaan Malaysia , , Shukor، Zaleha Abdul نويسنده School of Accounting, Faculty of Economics and Management, Universiti Kebangsaan Malaysia ,
Abstract :
Earnings management is often investigated from the opportunistic perspective and rarely
from the informational perspective. This study investigates earnings management from
the informational perspective by incorporating underinvestment as a moderating variable
in the relationship between earnings management and information asymmetry. A panel
data regression analysis on firms listed on the Main Board of Bursa Malaysia reveals
that earnings management reduces information asymmetry. We also provide evidence
that underinvestment moderates the relationship between earnings management and
information asymmetry. This finding suggests that earnings management among
underinvesting firms reduces information asymmetry. Therefore, underinvestment
motivates managers to convey informational earnings management.
