Purpose

This study aims to revisit the relationship between Shariah-compliant firms and earnings management. Specifically, the authors examine whether Shariah-certified firms have lower earnings management than non-Shariah-certified firms and how often a firm must hold its certification to observe considerably reduced earnings management. This study also explores how senior management ethnic dualism affects the association of Shariah certification and earnings management.

Design/methodology/approach

The authors analyze the hypothesized association between Shariah certification and earnings management using a panel regression model and several robustness tests, including the Heckman selection model. The sample consists of 547 nonfinancial firms listed on the Bursa Malaysia stock exchange, with 5,478 firm-year observations over the 2001–2016 sample period.

Findings

Shariah certification is found to mitigate earnings management, particularly for firms that consistently retain their Shariah status. The longer firms retain their Shariah certification continually, the lower the earnings management. Additionally, the results indicate that the negative impact of Shariah certification on earnings management is driven by ethnic duality when a specific ethnic group dominates the top management.

Research limitations/implications

Firms’ commitment to religious-based screening and continuation of certification plays a significant role in improving earnings quality. Firms are committed to abiding by the Shariah code of conduct instead of using the Shariah status for reputation purposes to attract investors.

Practical implications

For investors, the continuous compliance status is a crucial indicator of a firm’s commitment to comply with Shariah principles and to mitigate earnings management. Regarding policy implications, Shariah-compliance guidelines can constrain earnings manipulation, especially among firms lacking ethnic diversity.

Originality/value

The study shows that Shariah certification must be maintained consecutively to reduce earnings management. Shariah certification’s governance function is crucial in ethnically homogeneous firms, primarily when one ethnic group dominates the senior management.

中文翻译：

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符合伊斯兰教法的公司和盈余管理：延续性和种族重要吗？

目的

本研究旨在重新审视符合伊斯兰教法的公司与盈余管理之间的关系。具体而言，作者研究了经伊斯兰教法认证的公司的盈余管理是否低于未经伊斯兰教法认证的公司，以及公司必须多久持有一次认证才能观察到盈余管理的大幅减少。本研究还探讨了高级管理层的种族二元论如何影响伊斯兰教法认证和盈余管理的关联。

设计/方法论/途径

作者使用面板回归模型和几个稳健性检验（包括赫克曼选择模型）分析了伊斯兰教法认证与盈余管理之间假设的关联。该样本由在马来西亚证券交易所上市的 547 家非金融公司组成，在 2001 年至 2016 年样本期间对 5,478 家公司进行了年度观察。

发现

研究发现，伊斯兰教法认证可以减轻盈余管理，特别是对于始终保持伊斯兰教法地位的公司而言。公司持续保留伊斯兰教法认证的时间越长，盈余管理水平就越低。此外，结果表明，当特定种族群体在高层管理人员中占主导地位时，伊斯兰教法认证对盈余管理的负面影响是由种族二元性造成的。

研究局限性/影响

公司对基于宗教的筛选和持续认证的承诺在提高盈利质量方面发挥着重要作用。公司致力于遵守伊斯兰教法行为准则，而不是利用伊斯兰教法地位来提高声誉以吸引投资者。

实际影响

对于投资者而言，持续合规状态是公司承诺遵守伊斯兰教法原则和减少盈余管理的重要指标。关于政策影响，伊斯兰教法合规准则可以限制盈利操纵，特别是在缺乏种族多样性的公司中。

原创性/价值

研究表明，必须持续保持伊斯兰教法认证，以减少盈余管理。伊斯兰教法认证的治理功能对于种族同质的公司至关重要，尤其是当一个种族群体在高级管理层中占主导地位时。