A STATISTICAL INVESTIGATION OF THE EFFECTS OF SIZE ON INCOME SMOOTHING BEHAVIOUR OF COMPANIES LISTED IN NSE

Authors

  • Dr. Jutimala Bora Assistant Professor, Department of Commerce, Dibrugarh University, Dibrugarh, Assam

Keywords:

Accounting, Accounting Standard,, Creative Accounting, Income Smoothing

Abstract

Objectives. :Financial reporting is a process of communicating financial information of the companies to different stakeholders. Financial reporting process of companies has been constantly facing the problem of satisfying different stakeholders with diverse needs and desires. Satisfaction of one’s needs leads to the dissatisfaction of others. In order to satisfy all kind kinds of stakeholders, there is a need to maintain a balance between the two extreme points i.e. higher profit and lower profit. Due to various reasons like increasing level of competition and loopholes in the accounting standards, Companies are using different techniques of Creative Accounting to manipulate the Accounts.There are various forms of Creative Accounting. Income Smoothing is one type of Creative Accounting. In this study, it has been tried to determine theexistence of Income Smoothing in the Companies listed in Indiaand theassociation between the size of the companies and the Income Smoothing practices of Companies has also been studied.

Methods: Eckel Index has been calculated to detect the existence of Income Smoothing practices of Companies. Inferential Statistics like Chi Square Test and Binary Logistic Regression Model has been conducted.

Findings: Results show that Income Smoothing is prevalent among the Companies listed in India and Size of the Companies has been found as a significant factor affecting Income Smoothing Behaviour.

Downloads

Download data is not yet available.

References

Barnea, A., J. Ronen & S. Sadan, 1976, “Classificatory Smoothing of Income with Extraordinary Items”, The Accounting Review: 110-122

Griffiths, L. (1986), “Creative Accounting”, London: Sidgwick &Jackson.

Schpper, K. (1989), “Commentary on Creative Accounting”, Accounting Horizon, December, pp. 91-102.

Ronen, J. and Sadan S. (1981), “Smoothing income numbers, Objectives, Means, and Implications”,Reading, MA, Addison Wesley.

Cochran, W.G. (1977), “Sampling Techniques”, (3rd Edition), John Willlry and Sons, New York.

Eckel, N (1981), “The Income Smoothing Hypothesis Revisited”, Abacus17(1): 28-40.

Kamarudin Bin Anuar Khairul, Ismail Wan.Bt Adibah Wan and Ibrahim KamitMuhd,(2000) “Market Perception of Income smoothing Practices: Malaysian Evidence” Journal of social sciencep.715.

MohebiFatemeh, Mahmoodi Mohammad and Tabari Yadollahzadeh Ail Naser, (2013) “The Investigation of the Effect of Firm-Specific Accounting Variables on Income Smoothing of Companies-Evidence from Tehran Stock Exchange”,World of Sciences Journal,Volume: 01 Issue: 11 Pages: 109-116.

Panneerselelvan R. (2014), “Research Methodology”, PHI Learning Private Ltd., New Delhi.

Kothari C.R. (2005), “Research Methodology-Methods and Techniques”, New Age International (p) Ltd.

Sirkin M.R. (2006), “Statistics for Social Sciences”, Sage Publications, 3rd Edition, New Delhi.

Barman P.M, Hazarika J and Bora T (2021), “Statistical Methods” 1st Edition, Mahaveer Publications.

Downloads

Published

2022-09-30

How to Cite

Bora, D. J. . (2022). A STATISTICAL INVESTIGATION OF THE EFFECTS OF SIZE ON INCOME SMOOTHING BEHAVIOUR OF COMPANIES LISTED IN NSE. The Journal of Contemporary Issues in Business and Government, 28(3), 25–31. Retrieved from https://cibgp.com/au/index.php/1323-6903/article/view/2347

Issue

Vol. 28 No. 3 (2022): The journal of contemporary issues in business and government

Section

Articles

License

Copyright (c) 2022 The journal of contemporary issues in business and government

Creative Commons License

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

You are free to:

  1. Share — copy and redistribute the material in any medium or format for any purpose, even commercially.
  2. Adapt — remix, transform, and build upon the material for any purpose, even commercially.
  3. The licensor cannot revoke these freedoms as long as you follow the license terms.

Under the following terms:

  1. Attribution — You must give appropriate credit , provide a link to the license, and indicate if changes were made . You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
  2. No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.

Notices:

You do not have to comply with the license for elements of the material in the public domain or where your use is permitted by an applicable exception or limitation .

No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.