Abstract

This paper reviews the impact of corporate ownership concentration, insider ownership, and the development of regulatory and financial systems on the opportunistic behavior of managers to alter financial reporting. By using the panel data technique with a sample of banks from 25 Asian countries, the major findings indicate that ownership concentration as well as insider ownership positively impact the banks’ accrual-based earnings management. Results also reveal that an improvement in regulatory and financial systems restricts executives’ capacity to manage earnings. Islamic banking and IFRS adoption reduce the manipulation of earnings. Policy implications from the results are also discussed.