Table 1 Variable descriptions
Variables | Measures | Acronyms | Sources |
|---|---|---|---|
Accrual-based Earning Management | Discretionary accruals by Kasznik [36] | DAKZ | Data Stream and financial statement |
Managerial ownership | The total number of ordinary shares held by all directors of the board of scaled by the total number of ordinary shares of a firm at the end of its financial year | MAG | Annual Disclosure Books by EGX and ownership structure reports |
Family ownership | The percentage of total shares held by family | FAM | Annual Disclosure Books by EGX and ownership structure reports |
Governmental ownership | The total number of ordinary shares held by all government scaled by the total number of ordinary shares of a firm at the end of its financial year | GOV | Annual Disclosure Books by EGX and ownership structure reports |
Institutional ownership | The average percentage of shares outstanding owned by institutional investors at the end of its financial year | INST | Disclosure Books, and ownership structure reports |
Return on assets | Net income divided by the total assets at the beginning of the year | ROA | Data stream and financial statements |
Return on equity | Net income divided by the total equity at the beginning of the year | ROE | Data stream and financial statements |
Liquidity | Current assets to current liabilities | LIQ | Data stream and financial statements |
Leverage | The percentage of book value of total debt to total assets of a firm at the end of its financial year | LEV | Data stream and financial statements |
Gearings | The percentage of total debt to total ordinary equity of a firm at the end of its financial year | GEAR | Data stream and financial statements |
Firm size | Natural log of the book value of a firm’s total assets at the end of its financial year | SIZE | Data stream and financial statements |
Tangibility | It is measured as net property plant and equipment scaled by total assets | TANG | Data stream and financial statements |
Operating cycle | It is measured as the logarithm of the sum of the inventory period and the receivables period | OC | Data stream and financial statements |
Earnings flexibility | It is measured as the sum of inventories and receivables scaled by total assets | EFLEX | Data stream and financial statements |