Purpose

The main aim of this study is to examine the effect of investment in outside governance monitoring (IOGM), through non-executive directors' remuneration (NEDR) and external audit fees (AFEE), on real earnings management (REM) in an emerging market in the Southeast Asia region, Malaysia.

Design/methodology/approach

The data comprises 1,056 observations from manufacturing companies listed on Bursa Malaysia for the four-year period, 2013 to 2016. The study tests IOGM individually and aggregately with REM. Feasible generalized least squares (FGLS) regression is used to test the hypotheses.

Findings

The results show that NEDR is negatively and significantly associated with REM. Likewise, AFEE is significantly associated with lower REM. Aggregate IOGM significantly mitigates REM. Additional tests conducted show consistent findings.

Research limitations/implications

This evidence supports agency theory and signaling theory, that a high level of investment in governance monitoring signals a high demand for monitoring and fewer agency problems. It justifies more investment in outside scrutiny and monitoring to limit the existence of managers' opportunistic behavior in concentrated markets. This study relies on an aggregate measure of REM and focuses on manufacturing companies in Malaysia; thus, the results may not be the same using other measurements and samples.

Originality/value

The study, to the best of the researchers' knowledge, is the first to document evidence in an emerging market suggesting that higher NEDR and AFEE are individually and aggregately associated with lower REM. Policymakers, shareholders and researchers may consider investment in these two mechanisms as a proxy of high-quality monitoring that mitigates REM.

中文翻译：

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对外部治理监控和实际盈余管理的投资：来自新兴市场的证据

目的

本研究的主要目的是通过非执行董事薪酬 (NEDR) 和外部审计费 (AFEE) 研究外部治理监控 (IOGM) 投资对新兴市场实际盈余管理 (REM) 的影响在东南亚地区，马来西亚。

设计/方法/方法

该数据包括 2013 年至 2016 年四年期间在大马交易所上市的制造公司的 1,056 项观察结果。该研究单独和综合测试 IOGM 与 REM。可行广义最小二乘 (FGLS) 回归用于检验假设。

发现

结果表明，NEDR 与 REM 呈负相关且显着相关。同样，AFEE 与较低的 REM 显着相关。聚合 IOGM 显着减轻了 REM。进行的其他测试显示了一致的发现。

研究限制/影响

这一证据支持代理理论和信号理论，即对治理监督的高水平投资表明对监督的高需求和更少的代理问题。它证明了对外部审查和监督进行更多投资以限制经理在集中市场中的机会主义行为的存在是合理的。这项研究依赖于对 REM 的综合衡量，并侧重于马来西亚的制造公司；因此，使用其他测量和样本的结果可能不同。

原创性/价值

据研究人员所知，这项研究是第一个在新兴市场记录证据的研究，表明较高的 NEDR 和 AFEE 与较低的 REM 单独和总体相关。政策制定者、股东和研究人员可能会将对这两种机制的投资视为减轻 REM 的高质量监控的代理。