Does culture moderate the relationship between AAOIFI adoption and earnings management? Evidence from Islamic banks

M. Marei, Sherif El-Halaby, I. Elbendary, Khaled Hussainey

Research output: Chapter in Book/Report/Conference proceedingChapter (peer-reviewed)peer-review

Abstract

We examine whether culture moderates the relation between AAOIFI adoption and earnings management (EM). Using Gray and Hofstede culture framework a sample of 122 Islamic banks (IBs) across 24 countries for 2010 and 2017, we find a negative association between AAOIFI adoption and EM. Our analysis shows that cultural values of individualism; masculinity and UA positively strength the AAOIFI- EM assocaition. We also find that AAOIFI adoption results in a decrease in EM in high conservatism culture. Our findings offer a number of policy managerial and regulatory implications.
Original languageEnglish
Title of host publicationMonetary Policy, Islamic Finance, and Islamic Corporate Governance: An International Overview
EditorsToseef Azid, Murniati Mukhlisin, Nashr Akbar, Muhammad Tahir
PublisherEmerald Group Publishing Limited
Chapter12
Publication statusAccepted for publication - 26 Jul 2020

Keywords

  • Earnings management
  • Culture
  • AAOIFI standards
  • Islamic banks

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