Author

  • Abdul Mateen Shaikh

    • Shaheed Zulfiqar Ali Bhutto Institute of Science and Technology Islamabad, Pakistan
    • Pakistan

  • Muhammad Junaid Iqbal

    • Shaheed Zulfiqar Ali Bhutto Institute of Science and Technology Islamabad, Pakistan
    • Pakistan

  • Syed Zulfiqar Ali Shah

    • International Islamic University Islamabad, Pakistan
    • Pakistan

Abstract

Current study empirically investigates the impact of institutional ownership on discretionary accruals; we took a sample size of 68 listed non -financial companies from a population of 652 companies listed on Karachi Stock Exchange (KSE). This data was gathered for the period of 5 years, starting from 2006 up to 2010. Modified Jones Model was employed for this study to quantify discretionary accruals while institutional ownership measured by dividing number of shares kept by institutions from total number of shares outstanding. The fix effect model showed that the magnitude of discretionary accruals in Pakistani listed firms tends to significantly decrease for the firms where institutions hold a decent amount of share of that particular firm. Thus the findings of this study are in consensus with our hypothesis, which proposes that institutional ownership is quite an effective tool in aligning insider management and administration to take the right decision for value maximizing of the companies, and thus shareholders.

Keywords

References

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How to Cite

Shaikh, A. M., Iqbal, M. J., & Shah, S. Z. A. (2012). Institutional Ownership and Discretionary Accruals: Empirical Evidences from Pakistani Listed Non-Financial Companies. Information Management and Business Review, 4(4), 217-222. https://doi.org/10.22610/imbr.v4i4.982

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Copyright (c) 2012 Abdul Mateen Shaikh, Muhammad Junaid Iqbal, Syed Zulfiqar Ali Shah (Author)

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Research Paper

Published in

Vol. 4 No. 4 (2012) Service Quality, Islamic Banking & Brand Equity View issue contents

Published

2012-04-15

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