Moderating Effect of Earnings Management in the Relationship between Sustainability Reporting Initiatives and Value Relevance

Mashiur Rahman(1), Siti Zaleha Abdul Rasid(2), Rohaida Basiruddin(3),


(1) Universiti Teknologi Malaysia International Business School (UTM-AHIBS), Kuala Lumpur, Malaysia
(2) Universiti Teknologi Malaysia International Business School (UTM-AHIBS), Kuala Lumpur, Malaysia
(3) Universiti Teknologi Malaysia International Business School (UTM-AHIBS), Kuala Lumpur, Malaysia

Abstract

The purpose of this study is to investigate whether sustainability disclosures are associated with value relevance in Bangladesh. The moderating effect of earnings management is also examined to observe the right direction in this relationship. Based on prior studies on sustainability disclosure and global reporting initiatives guidelines, this research uses the content analysis approach to assess the magnitude of sustainability initiatives of 30 Bangladeshi banking companies over the period 2009–2017. The Ohlson price model and discretionary accruals are also employed as measures of value relevant of sustainability disclosure and earnings management, respectively. The findings state that sustainability reports positively affect the equity value, whereas earnings management negatively moderates the direction of this association. Results also confirm that management should be responsive of the impending capital market effects of voluntary disclosures regarding sustainability issues. These findings could have several implications for banks, investors, and policymakers.

Keywords

earnings management; sustainability reporting; value relevance

Dimension

Altmetric

PlumX


DOI:
https://doi.org/10.28992/ijsam.v4i2.309

Refbacks

  • There are currently no refbacks.


Indonesian Journal of Sustainability Accounting and Management (IJSAM) 
p-ISSN 2597-6214 | e-ISSN 2597-6222 
Published by Universitas Pasundan, Indonesia.
Email:
ardigunardi@unpas.ac.id (paper handling issues) 
ijsam@unpas.id; ijsam.journal@gmail.com (publication issues)

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.