| || || Lata, Asha Shyreen.|
| || || Analyses of earnings management practices in state owned enterprises : case studies of the Housing Authority and the Fiji Electricity Authority |
Author:Lata, Asha Shyreen.
Institution: University of the South Pacific.
Call No.: pac In Process
Copyright:Under 10% of this thesis may be copied without the authors written permission
Abstract: Earnings management practices lower the quality of financial reporting as they are often used to obscure the true performance of businesses. This study analyses the possibilities of earnings management in the two statutory organizations in Fiji, the Housing Authority and the Fiji Electricity Authority, over the period 1990 to 2004. The results suggest that the entities may have practiced earnings management by using provisions, amortization and depreciation, revaluation, capitalisations and misclassification of government grants. These practices were largely the result of professional judgment and flexibility permitted by the accounting standards, although, there were a few cases, which occurred due to non-compliance with generally accepted accounting practices. Further, agency relationships provided several economic incentives to misreport the financial outcome, such as reflecting performance of the incoming Board and/or government, converting debts into equity, satisfying debt covenants and attracting outside financiers. These findings are consistent with the a priori expectation derived from studies of earnings management that such practices arise because of flexibility in accounting standards and agency relationships.