PRUDENTIAL REGULATORY REGIMES, ACCOUNTING STANDARDS, AND EARNINGS MANAGEMENT IN THE BANKING INDUSTRY

We analyze if a change in accounting standard or a change in prudential regulation impacts banks’ loan loss provision. We find that, in general, the banks using a principles-based accounting standard exhibit a lower level of earnings management compared to banks using a rules-based accounting standa...

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Bibliographic Details
Main Authors:	Ali Ashraf, M. Kabir Hassan, Kyle J. Putnam, Arja Turunen-Red
Format:	Article
Language:	Indonesian
Published:	Bank Indonesia 2019-02-01
Series:	Bulletin Ekonomi Moneter dan Perbankan
Subjects:	Accounting standard Banks Loan loss provision
Online Access:	https://www.bmeb-bi.org/index.php/BEMP/article/view/975

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spelling	doaj-2d5cbb5c71e04dda9c5038dc88c0c8de2020-11-25T00:05:19ZindBank IndonesiaBulletin Ekonomi Moneter dan Perbankan1410-80462460-91962019-02-0121336739410.21098/bemp.v21i3.975975PRUDENTIAL REGULATORY REGIMES, ACCOUNTING STANDARDS, AND EARNINGS MANAGEMENT IN THE BANKING INDUSTRYAli Ashraf0M. Kabir Hassan1Kyle J. Putnam2Arja Turunen-Red3Frostburg State UniversityUniversity of New OrleansUniversity of New OrleansUniversity of New OrleansWe analyze if a change in accounting standard or a change in prudential regulation impacts banks’ loan loss provision. We find that, in general, the banks using a principles-based accounting standard exhibit a lower level of earnings management compared to banks using a rules-based accounting standard. When a country moves from pro-cyclical macro-prudential regulations to a dynamic provisioning regime, banks are more likely to set aside a larger amount of loan loss provision for the purpose of income smoothing.https://www.bmeb-bi.org/index.php/BEMP/article/view/975Accounting standardBanksLoan loss provision
collection	DOAJ
language	Indonesian
format	Article
sources	DOAJ
author	Ali Ashraf M. Kabir Hassan Kyle J. Putnam Arja Turunen-Red
spellingShingle	Ali Ashraf M. Kabir Hassan Kyle J. Putnam Arja Turunen-Red PRUDENTIAL REGULATORY REGIMES, ACCOUNTING STANDARDS, AND EARNINGS MANAGEMENT IN THE BANKING INDUSTRY Bulletin Ekonomi Moneter dan Perbankan Accounting standard Banks Loan loss provision
author_facet	Ali Ashraf M. Kabir Hassan Kyle J. Putnam Arja Turunen-Red
author_sort	Ali Ashraf
title	PRUDENTIAL REGULATORY REGIMES, ACCOUNTING STANDARDS, AND EARNINGS MANAGEMENT IN THE BANKING INDUSTRY
title_short	PRUDENTIAL REGULATORY REGIMES, ACCOUNTING STANDARDS, AND EARNINGS MANAGEMENT IN THE BANKING INDUSTRY
title_full	PRUDENTIAL REGULATORY REGIMES, ACCOUNTING STANDARDS, AND EARNINGS MANAGEMENT IN THE BANKING INDUSTRY
title_fullStr	PRUDENTIAL REGULATORY REGIMES, ACCOUNTING STANDARDS, AND EARNINGS MANAGEMENT IN THE BANKING INDUSTRY
title_full_unstemmed	PRUDENTIAL REGULATORY REGIMES, ACCOUNTING STANDARDS, AND EARNINGS MANAGEMENT IN THE BANKING INDUSTRY
title_sort	prudential regulatory regimes, accounting standards, and earnings management in the banking industry
publisher	Bank Indonesia
series	Bulletin Ekonomi Moneter dan Perbankan
issn	1410-8046 2460-9196
publishDate	2019-02-01
description	We analyze if a change in accounting standard or a change in prudential regulation impacts banks’ loan loss provision. We find that, in general, the banks using a principles-based accounting standard exhibit a lower level of earnings management compared to banks using a rules-based accounting standard. When a country moves from pro-cyclical macro-prudential regulations to a dynamic provisioning regime, banks are more likely to set aside a larger amount of loan loss provision for the purpose of income smoothing.
topic	Accounting standard Banks Loan loss provision
url	https://www.bmeb-bi.org/index.php/BEMP/article/view/975
work_keys_str_mv	AT aliashraf prudentialregulatoryregimesaccountingstandardsandearningsmanagementinthebankingindustry AT mkabirhassan prudentialregulatoryregimesaccountingstandardsandearningsmanagementinthebankingindustry AT kylejputnam prudentialregulatoryregimesaccountingstandardsandearningsmanagementinthebankingindustry AT arjaturunenred prudentialregulatoryregimesaccountingstandardsandearningsmanagementinthebankingindustry
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PRUDENTIAL REGULATORY REGIMES, ACCOUNTING STANDARDS, AND EARNINGS MANAGEMENT IN THE BANKING INDUSTRY

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