Relationship between SET ESG Ratings and Earnings Management of Listed Companies on the Stock Exchange of Thailand: Beneish M-Score Model
Article Sidebar
Main Article Content
Abstract
This study aims to examine the relationship between the SET ESG Ratings and earnings management, as measured by the Beneish M-Score Model, of companies listed on the Stock Exchange of Thailand at the end of 2023. Secondary data were collected from the SETSMART database, with a total of 537 companies, and analyzed using descriptive statistics and binary logistic regression analysis. Results of the study reveal that the SET ESG Ratings is not associated with earnings management of the listed companies. Additionally, corporate governance scores are not associated with earnings management. However, free cash flow is negatively associated with earnings management, while firm size is positively associated with earnings management. Logistic regression analysis methods can be accurately identified 84.50 percent.
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
The articles published in the journals are the authors' opinions, not the opinion of the editorial team or administrative staff. The articles published is copyright of the Journal of Business Administration and Accounting, Khon Kaen University.
References
Aldieri, L., Amendola, A., & Candila, V. (2023). The impact of ESG scores on risk market performance. Sustainability, 15(9), 7183. https://doi.org/10.3390/su15097183.
Alodat, A. Y., Amosh, H. A., Alorayni, O., & Khatib, S. F. A. (2024). Does corporate sustainability disclosure mitigate earnings management: Empirical evidence from Jordan. International Journal of Disclosure and Governance, 21, 165–174. https://doi.org/10.1057/s41310-023-00213-4.
Almubarak, W. I., Chebbi, K., & Ammer, M. A. (2023). Unveiling the connection among ESG, earnings management, and financial distress: Insights from an emerging market. Sustainability, 15(16), 12348. https://doi.org/10.3390/su151612348.
Apimolbud, T., & Hansawong, S. (2018). The relationship between sustainability performance and stock return: An empirical study of the listed companies on the Stock Exchange of Thailand awarded Dow Jones Sustainability Index (DJSI). Rajapark Journal, 12(25), 37-51.
Beneish, M. D. (1999). The detection of earning manipulation. Financial Analyst Journal, 55(5), 24–36.
Chantabutr, P. (2022). The impact of environmental, social, and governance on the financial distress risk of companies listed on the Stock Exchange of Thailand: The context of economic crisis. Journal of Accounting Profession, 18(59), 26-52.
http://www.jap.tbs.tu.ac.th/files/Article/Jap59/Full/JAP59Panamon.pdf. [in Thai]
Cheung, A. W. K. (2011). Do stock investors value corporate sustainability? Evidence from an event study. Journal of Business Ethics, 99, 145-165. https://doi.org/10.1007/s10551-010-0646-3.
Chodchoy, P., Sutjasen, A., Jaipiem, k., & Klaewtanong, A. (2023). Effects of corporate governance efficiency on management efficiency and enterprise value of companies in the Market for Alternative Investment (MAI). University of the Thai Chamber of Commerce Journal Humanities and Social Sciences, 43(3), 62–83. https://so06.tci-thaijo.org/index.php/utccjournalhs/article/view/262561. [in Thai]
Consoni, S., Colauto, R. D., & Franco de Lima, G. A. S. (2017). Voluntary disclosure and earningsmanagement: Evidence from the Brazilian capital market. Revista Contabilidade & Finanças, 28(74), 249-263. https://doi.org/10.1590/1808-057x201703360.
Elmaghrabi, M. E. & Diab, A. (2023). Anti-corruption corporate disclosures and earnings management: Evidence from a developed market. Journal of Financial Crime, 31(6), 1302-1319. https://doi.org/10.1108/JFC-09-2023-0235.
Gajdosikova, D., Valaskova, K., & Durana, P. (2022). Earnings management and corporate performance in the scope of firm-specific features. Journal of Risk and Financial Management, 15(10), 426. https://doi.org/10.3390/jrfm15100426.
Gerged, A. M., Albitar, K. & Al-Haddad, L. (2023). Corporate environmental disclosure and earnings management-The moderating role of corporate governance structures. International Journal of Finance & Economics, 28(3), 2789–2810. https://doi.org/10.1002/ijfe.2564.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis(7th Ed.). Prentice Hall.
Jatiningrum, C., Abdul-Hamid, M. A., & Popoola, O. M. J. (2016). The impact of disclosure quality on corporate governance and earnings management: Evidence from companies in Indonesia. International Journal of Economics and Financial Issues, 6(4S). 118-125. https://www.econjournals.com/index.php/ijefi/article/view/2698.
Jamsai, S., Boonmuenwai, S. & Jintawattanagul, S. (2024). Influence of environmental, social, and governance (ESG) performance that affects sustainable growth through the profitability of companies listed on the Stock Exchange, Service Industry Group. KKBS JOURNAL of Business Administration and Accountancy, 8(2). 59-74. https://so04.tci-thaijo.org/index.php/kkbsjournal/article/view/271308/183944.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4). 305-360. https://doi.org/10.1016/0304-405X(76)90026-X.
Manapreechadeelert, P., Dampitakse, K., & Ngudgratoke, S. (2024). Impact of environmental,social and governance (ESG) performance on firm performance: Interaction effect of managerial efficiency. ABAC Journal. 44(4), 483-499. https://doi.org/10.59865/abacj.2024.62.
Nguyen, Q., Kim, M. H., & Ali, S. (2024). Corporate governance and earnings management: Evidence from Vietnamese listed firms. International Review of Economics and Finance, 89, 775–801. https://doi.org/10.1016/j.iref.2023.07.084.
Oktaviani, M., & Mochklas, M. (2019). Free cash flow, size, and earning management. Advances in Social Science, Education and Humanities Research, 436, 62-65. https://doi.org/10.2991/assehr.k.200529.013.
Phetruen, W. (2018). Earning management behaviour and related factors. Journal of Business, Innovation and Sustainability (JBIS), 13(1), 29-40. https://so02.tci-thaijo.org/index.php/BECJournal/article/view/103245. [in Thai]
Promtong, N. (2023). Effects of ownership structures and board characteristics on listed firms in Thailand Sustainability Investment index. BU Academic Review, 22(1), 61-79. https://so01.tci-thaijo.org/index.php/buacademicreview/article/view/262968. [in Thai]
Pumiviset, W. & Suttipun, M. (2024). Corporate social responsibility and SMEs’ performance: mediating role of sustainable competitive advantage. ABAC Journal, 44(4), 236-253. https://doi.org/10.59865/abacj.2024.47.
Saithong-in, S. & Promtong, N. (2023). Thailand Sustainability Investment designation and market-based performance of listed companies in the Stock Exchange of Thailand. Sripatum Review of Humanities and Social Sciences, 23(1), 7-21. https://so05.tci-thaijo.org/index.php/spurhs/article/view/261648. [in Thai]
Santoso, A. (2023). The effect of free cash flow and leverage on earnings management: Moderating role of good corporate governance. Asian Management and Business Review, 3(1), 14-23. https://doi.org/10.20885/AMBR.vol3.iss1.art2.
Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355-374.
Sustainable Capital Market Development. (n.d.). Retrieved from https://setsustainability.com/page/disclosure.
Sustainable Capital Market Development. (2023). SET ESG Ratings. Retrieved from https://setsustainability.com//libraries/1258/item/set-esg-ratings.
Suttipun, M. (2023). ESG performance and corporate financial risk of the Alternative Capital Market in Thailand. Cogent Business & Management, 10(1). https://doi.org/10.1080/23311975.2023.2168290.
The Thai Institute of Directors Association. (n.d.). Corporate governance report of Thai listed companies 2023. Retrieved from https://thai-iod.com/imgUpload/CGR2023%20Full%20Version.pdf.
The Securities and Exchange Commission. (n.d.). Criminal sanction - annual statistics. Retrieved from https://www.sec.or.th/TH/Documents/AnnualStatistics/enforce-statistic-criminal-TH.pdf.
Valaskova, K., & Fedorko, R. (2021). Beneish M-score: A measure of fraudulent financial transactions in global environment?. SHS Web of Conferences, 92, 02064. https://doi.org/10.1051/shsconf/20219202064.
Zhang, P., Wei, J., & Jiang, J. (2023). ESG information disclosure and corporate earnings management research on the moderating effect based on media attention. Journal of Education, Humanities and Social Sciences, 16, 69-79. https://doi.org/10.54097/ehss.v16i.9499.
