Table 2 Variables definition.
Abbreviation | Full Name | Description | Source of data |
|---|---|---|---|
DACC | Discretionary Accruals | Absolute value of the residuals from the model of Jones (1991) | Author calculation based on Eq. 6. |
RM-1 | Real Earnings Management | RM-1 = APRO- ADEX | Author calculation based on Eq. 11 |
RM-2 | Real Earnings Management | RM-2= (-ACFO)- ADEX | Author calculation based on Eq. 12 |
ACFO | Abnormal cash flow from operation | ACFO is estimated based on the method of Jones (1991) residual of Equation 6.8 | Author calculation based on Eq. 8 |
APRO | Abnormal Production Cost | APRO is estimated based on the method of Jones (1991) residual of equation 6.9 | Author calculation based on Eq. 9 |
ADEX | Abnormal discretionary expenses | ADEX is estimated based on method of Jones (1991) residuals of equation 6.10 | Author calculation based on Eq. 10 |
MCON | Military connection | 1 if a firm in a given year has at least one ex-military/former-military director on the board, otherwise zero | Annual Reports |
RMD | Military percentage | Ratio of military directors to non-military directors | Annual Reports |
FSZ | Firm Size | The natural logarithm of total asset at the end of the year | ORBIS |
LEV | Leverage | Total liabilities divided by total assets at the end of the year | ORBIS |
FTY | Firm type | The industry type in which the company is listed | Based on 2-digit codes of NAICS 2022 |
FAG | Firm Age | Number of years since Incorporation of the Firm | Annual reports |
CAP | Capital intensity | Ratio of net property, plant and equipment to total Assets | ORBIS |
AUQ | Audit quality | 1 if firm audited by big four otherwise 0 | Annual Reports |
