Factors affecting earnings management behavior in food manufacturing companies listed on HOSE and HNX from 2017 to 2021

Abstract

In the context that the stock market is increasingly developing and plays an important role in stabilizing Vietnam's capital market, financial information of enterprises, especially profits, not only determines the existence of the business, but also greatly influences the decision of stakeholders to use the profits index as a basis. It is also one of the main reasons for the existence of financial fraud through earnings manipulation on financial statements with a variety of motives for firms to get their profits by using finance adjustment techniques. Currently, in the world as a whole and in Vietnam, there have been many studies on the earnings management behaviors based on incentives that are beneficial to businesses, showing the prevalence and interest of stakeholders in this issue. The study “Factors affecting earnings management behavior in food manufacturing companies listed on HOSE and HNX from 2017 to 2021” was conducted to determine and measure the influence of factors on the earnings management behavior of enterprises in food manufacturing listed on HOSE and HNX. Moreover, currently, the food manufacturing and processing industry in Vietnam is on an upward trend and becomes very attractive to foreign investors. In the study, the authors used the Jones (1991) model to measure earnings management, combined with a quantitative research method based on a survey sample of 32 listed companies with a total of 160 observations during the period from 2017 to 2021. The collected data is processed through the STATA to analyze the influence of 6 factors on the earnings management be that the authors have synthesized from previous studies and related grounded theories, including: Company Size; Operating Period; Auditing Firm; Profitability; Financial Leverage; Independent ratio of Board of Directors. Through the analysis results, the study has found 5 factors Company Size, Auditing Firm, Profitability, Financial Leverage, Independent ratio of Board of Directors that are significantly correlated with the dependent variable, which is the earnings management of companies, and 1 factor (Operating Period) remaining no correlation. From there, propose suggestions and solutions to limit the earnings management of food manufacturing companies, and to help stakeholders using the financial statement’s information to have an objective overview when making decisions.