Home > Research > Publications & Outputs > Capital and Earnings Management

Electronic data

  • MS_16_3_771_Final_Draft_LM (1)

    Rights statement: This is the author’s version of a work that was accepted for publication in The International Journal of Accounting. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in The International Journal of Accounting, 53, 1, 2018 DOI: 10.1016/j.intacc.2018.02.002

    Accepted author manuscript, 969 KB, PDF document

    Available under license: CC BY-NC-ND: Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License

Links

Text available via DOI:

View graph of relations

Capital and Earnings Management: Evidence from Alternative Banking Business Models

Research output: Contribution to journalJournal articlepeer-review

Published

Standard

Capital and Earnings Management : Evidence from Alternative Banking Business Models. / El Nahass, Marwa; Izzeldin, Marwan; Steele, Gerald Roy.

In: The International Journal of Accounting, Vol. 53, No. 1, 03.2018, p. 20-32.

Research output: Contribution to journalJournal articlepeer-review

Harvard

APA

Vancouver

Author

El Nahass, Marwa ; Izzeldin, Marwan ; Steele, Gerald Roy. / Capital and Earnings Management : Evidence from Alternative Banking Business Models. In: The International Journal of Accounting. 2018 ; Vol. 53, No. 1. pp. 20-32.

Bibtex

@article{1900e54a2a2440c6bf961c9578aad7ad,
title = "Capital and Earnings Management: Evidence from Alternative Banking Business Models",
abstract = "This paper examines whether institutional characteristics distinguishing Islamic from conventional banks lead to distinctive capital and earnings management behavior through the use of loan loss provisions. In our sample countries, the two banking sectors operate under different regulatory frameworks: conventional banks currently apply the “incurred” loan loss model until 2018 whereas Islamic banks mandatorily adopt an “expected” loan loss model. Our results provide significant evidence of capital and earnings management practices via loan loss provisions in conventional banks. This finding is more prominent for large and loss-generating banks. By contrast, Islamic banks tend not to use loan loss provisions in either capital or earnings management, irrespective of the bank's size, earnings profile, or the structure of their loan loss model. This difference may be attributed to the constrained business model of Islamic banking, strict governance, and ethical orientation.",
keywords = "IFRS, Regulatory capital management, Earnings management, Expected loan losses, Incurred loan losses",
author = "{El Nahass}, Marwa and Marwan Izzeldin and Steele, {Gerald Roy}",
note = "This is the author{\textquoteright}s version of a work that was accepted for publication in The International Journal of Accounting. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in The International Journal of Accounting, 53, 1, 2018 DOI: 10.1016/j.intacc.2018.02.002",
year = "2018",
month = mar,
doi = "10.1016/j.intacc.2018.02.002",
language = "English",
volume = "53",
pages = "20--32",
journal = "The International Journal of Accounting",
issn = "0020-7063",
publisher = "Elsevier",
number = "1",

}

RIS

TY - JOUR

T1 - Capital and Earnings Management

T2 - Evidence from Alternative Banking Business Models

AU - El Nahass, Marwa

AU - Izzeldin, Marwan

AU - Steele, Gerald Roy

N1 - This is the author’s version of a work that was accepted for publication in The International Journal of Accounting. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in The International Journal of Accounting, 53, 1, 2018 DOI: 10.1016/j.intacc.2018.02.002

PY - 2018/3

Y1 - 2018/3

N2 - This paper examines whether institutional characteristics distinguishing Islamic from conventional banks lead to distinctive capital and earnings management behavior through the use of loan loss provisions. In our sample countries, the two banking sectors operate under different regulatory frameworks: conventional banks currently apply the “incurred” loan loss model until 2018 whereas Islamic banks mandatorily adopt an “expected” loan loss model. Our results provide significant evidence of capital and earnings management practices via loan loss provisions in conventional banks. This finding is more prominent for large and loss-generating banks. By contrast, Islamic banks tend not to use loan loss provisions in either capital or earnings management, irrespective of the bank's size, earnings profile, or the structure of their loan loss model. This difference may be attributed to the constrained business model of Islamic banking, strict governance, and ethical orientation.

AB - This paper examines whether institutional characteristics distinguishing Islamic from conventional banks lead to distinctive capital and earnings management behavior through the use of loan loss provisions. In our sample countries, the two banking sectors operate under different regulatory frameworks: conventional banks currently apply the “incurred” loan loss model until 2018 whereas Islamic banks mandatorily adopt an “expected” loan loss model. Our results provide significant evidence of capital and earnings management practices via loan loss provisions in conventional banks. This finding is more prominent for large and loss-generating banks. By contrast, Islamic banks tend not to use loan loss provisions in either capital or earnings management, irrespective of the bank's size, earnings profile, or the structure of their loan loss model. This difference may be attributed to the constrained business model of Islamic banking, strict governance, and ethical orientation.

KW - IFRS

KW - Regulatory capital management

KW - Earnings management

KW - Expected loan losses

KW - Incurred loan losses

U2 - 10.1016/j.intacc.2018.02.002

DO - 10.1016/j.intacc.2018.02.002

M3 - Journal article

VL - 53

SP - 20

EP - 32

JO - The International Journal of Accounting

JF - The International Journal of Accounting

SN - 0020-7063

IS - 1

ER -