Global Academy of Training and Research Journal

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DOI 10.35609/gjbssr.2013.1.1(10)

Reference to this paper should be made as follows: Abdullah, H; Bujang, I; Ahmad, I. (2013). Loan Loss Provisions and Earnings Management in Malaysian Banking Industry, Global J. Bus. Soc. Sci. Review, 1 (1): 93-104. https://doi.org/10.35609/gjbssr.2013.1.1(10)

Received: December 8, 2012 | Accepted: February 10, 2013

Loan Loss Provisions and Earnings Management in Malaysian Banking Industry
Hasni Abdullah, Imbarine Bujang, Ismail Ahmad
Universiti Teknologi MARA Pahang, Pahang, Universiti Teknologi MARA Sabah, Sabah, Universiti Teknologi MARA Shah Alam, Selangor, Malaysia Abstract

Objective The main purpose of the study is to investigate the presence of earnings management incentive in affecting the LLP decision of commercial banks in Malaysia, focusing on the relation between loan loss provisions and earnings before tax and provisions.

Methodology/Technique This study applies the pooled Ordinary Least Square model in assessing the determinants of the LLP.

Findings The empirical findings clearly indicate that the LLP in Malaysian commercial banks is affected by earnings management for that particular period

Type of Paper: Empirical paper

Novelty : The expansion of the existing research in Malaysia in order to examine the extent to which the Malaysian banks engage in earnings and capital management, extends the period of investigation by considering the recent global financial crisis 2007-2009.

Keywords: Loan Loss Provisions; Earnings Management; Capital Management; Macroeconomic Factors; Commercial Banks.

Price: USD 25