The effect of cultural dimensions on earnings management practices in some ASEAN countries

The main objective of this research is to demonstrate empirically the effect of cultural values on earnings' management in some ASEAN countries. This research was conducted by examining the effect of uncertainty avoidance, power distance, collectivism, and masculinity as independent variables on the mean rate of earnings' management in each country as the dependent variable. Samples were taken from the financial statements and annual report companies listed on the Indonesia Stock Exchange (IDX), Singapore Exchange Limited (SGX), The Stock Exchange of Thailand (SET), Bursa Malaysia, the Hanoi Stock Exchange (HNX), and the Philippine Stock Exchange (PSE) in 2010-2013. The sample was selected using purposive sampling method and acquired 52 companies. The study used linear regression tests. The results of this study show that only one cultural dimension is significant in explaining difference in earnings' management in the studied context. The results found a positive relationship between uncertainty avoidance and earning management, no effect between power distance and earnings' management, no effect between collectivism and earnings' management, and no effect between masculinity and earnings' management.