The Relationship between Managerial Ownership and Earnings Management - Evidence from Mongolian Listed Firms

Abstract

The purpose of this study is to examine the relationship between managerial ownership and earnings management of listed Mongolian firms in 2009-2015. Most of the Mongolian enterprises were state-owned and state-controlled until the transition to free market economy. The stock exchange was established by privatizing those state-owned companies and was created managerial owners. Proxy of earnings management is defined by discretionary accruals. The managerial ownership is measured as the percentage of shareholder's shares directly or indirectly held by manager. A total of 122 Mongolian listed firms are chosen as a study sample and found that managerial ownership is negatively and significantly related to earnings management. This result is almost similar with previous literatures.