—This paper provides evidence on the motives for directors to manage earnings. Adapting theory of reasoned actions, we examine three different motives (i.e. altruistic, speculative, and pressure from affiliated parties) for directors to manage earnings. We find that the primary motive for directors to be involved in earnings management activity is derived from altruistic motivation, which refers to the motive that involves concern about the benefits of company. Directors work hard to meet market expectations and are more concerned about their company’s reputation rather than their own personal benefits.
—Directors, earnings management, motivation.
The authors are with the Universiti Malaysia Terengganu, Kuala Terengganu, Terengganu, 21030 Malaysia (e-mail: email@example.com, firstname.lastname@example.org, email@example.com).
Cite:H. A. Hashim, Z. Salleh, and A. Mohamad Ariff, "The Underlying Motives for Earnings Management: Directors' Perspective," International Journal of Trade, Economics and Finance vol.4, no.5, pp. 296-299, 2013.