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Management Science Letters

ISSN 1923-9343 (Online) - ISSN 1923-9335 (Print)
Quarterly Publication
Volume 3 Issue 6 pp. 1757-1766 , 2013

A study on relationship between cultural values and earnings quality: A case study on Iranian banking indus Pages 1757-1766 Right click to download the paper Download PDF

Authors: Hassan Ghodrati, Hassan Mehrmanesh, Seyed Reza Ghazi Fini

Keywords: Cultural Values, Earnings Management, Just-Meeting-or-BeatingEarnings Loan Loss Provisio

Abstract: This performs an empirical investigation to evaluate the relationship between cultural values and earnings quality in some Iranian banks over the period 2005-2011. The individualism, uncertainty avoidance, power distance and masculinity dimensions are regarded as criteria for cultural values. The study also considers change in return on assets and loan loss provisions as the main criteria for earnings quality of banks. For measuring the cultural values, the questionnaire of Hofstede [Hofstede, G. (1994). The business of international business is culture. International business review, 3(1), 1-14.]. The study also uses two measures to calculate earnings quality: 1-just-meet-or-beat the prior year’s earnings and 2- Income smoothing through loan loss provisions based on compound linear regression. Research results showed that there was a weak relationship between cultural values and earnings management.

How to cite this paper
Ghodrati, H., Mehrmanesh, H & Fini, S. (2013). A study on relationship between cultural values and earnings quality: A case study on Iranian banking indus.Management Science Letters , 3(6), 1757-1766.

Refrences
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Don, M., Billingsley, R. S., & Schneller, M. I. (2009). Information uncertainty and auditor reputation.
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Fonseca, A. R., & Gonzalez, (2008). Cross-country determinants of bank income smoothing by
managing loan- loss provisions. Journal of Banking and Finance, 32(2), 217- 228.

Han, S., Kang, T., Salter, S., & Yoo, Y. K. (2010). A Cross-country Study on The effects of National
Culture on Earnings Management. Journal of International Business studies, 41(1), 123- 141.

Hofstede, G. (1994). The business of international business is culture. International business
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Hofstede G. (1991). Cultures and organization: Software of The mind. London: McGraw-Hill Book
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Kanagaretnam, K., Yeow Lim, C., & Lobo, G. J. (2011). Effects of national culture on earnings
quality of banks. Journal of International Business Studies, 42, 853- 874.

Nikoomaram, H., Kavousy, E., Jabbarzade Kangarluei, S., & Bayazidi, A. (2010). The relationship
between cultural values and earnings management in companies accepted in Tehran Stock
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Perera, M.H. (1989). Towards a framework to analyze the impact of culture on accounting. The
International Journal of Accounting, 24, 42- 56.

Wild, J.J., Bernstein, L.A., & Subramanyam, K. R. (2001). Financial Statement Analysis. 7ed New
York MCGraw-Hill Higher Education
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Journal: Management Science Letters | Year: 2013 | Volume: 3 | Issue: 6 | Views: 2295 | Reviews: 0

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