Table 1 Variables description Variable... | Emerald Publishing

Table 1

Variables description

Variable	Symbol	Description	References
Real earnings management	REM1	Real earnings management is calculated by Roychowdhury (2006) using abnormal production costs and abnormal discretionary expenses	Roychowdhury (2006)
Alternative measure of real earnings management	REM2	Real earnings management is calculated by Roychowdhury (2006) using abnormal cash flow from operations, abnormal production costs, and abnormal discretionary expenses	Roychowdhury (2006)
Audit quality	Audit	Dummy variable, 1 if the company is audited by a Big 4 firm, 0 if otherwise	Lennox and Pittman (2010)
Leverage	Leverage	Calculated by total debts by total assets	Kuan et al. (2011)
Cash flow	CFO	Cash flow from operations scaled by lagged total assets	Roychowdhury (2006)
Firm size	Firmsize	Calculated by logarithm of total assets	Huguet and Gandía (2016)
Profitability	ROA	Return on assets ratio, calculated by scaling earnings before interest and taxes (EBIT) by total assets	Githaiga et al. (2022)
Tangible assets	PPE	Calculated by property, plant, and equipment by total assets	Xiong (2016)
State ownership	State	Dummy variable, 1 if the company has state ownership, 0 if otherwise	Nguyen et al. (2021)
Sector	Sector	Dummy variable, representing the industry of the company, taking values from 1 to 15, where each number corresponds to a specific industry classification	Datta et al. (2013)

Variable	Symbol	Description	References
Real earnings management	REM1	Real earnings management is calculated by Roychowdhury (2006) using abnormal production costs and abnormal discretionary expenses	Roychowdhury (2006)
Alternative measure of real earnings management	REM2	Real earnings management is calculated by Roychowdhury (2006) using abnormal cash flow from operations, abnormal production costs, and abnormal discretionary expenses	Roychowdhury (2006)
Audit quality	Audit	Dummy variable, 1 if the company is audited by a Big 4 firm, 0 if otherwise	Lennox and Pittman (2010)
Leverage	Leverage	Calculated by total debts by total assets	Kuan et al. (2011)
Cash flow	CFO	Cash flow from operations scaled by lagged total assets	Roychowdhury (2006)
Firm size	Firmsize	Calculated by logarithm of total assets	Huguet and Gandía (2016)
Profitability	ROA	Return on assets ratio, calculated by scaling earnings before interest and taxes (EBIT) by total assets	Githaiga et al. (2022)
Tangible assets	PPE	Calculated by property, plant, and equipment by total assets	Xiong (2016)
State ownership	State	Dummy variable, 1 if the company has state ownership, 0 if otherwise	Nguyen et al. (2021)
Sector	Sector	Dummy variable, representing the industry of the company, taking values from 1 to 15, where each number corresponds to a specific industry classification	Datta et al. (2013)

Note(s): This table provides definitions of all variables used in the research

Source(s): Author proposed