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Hi, thanks for your exciting video. how can you state for this:Let's proceed with a detailed, simplified example using the Modified Jones Model to assess the financial reporting quality of a hypothetical listed deposit money bank in Nigeria. ### Simplified Example Using the Modified Jones Model #### Data for Bank ABC (Hypothetical): - **Net Income (NI):** ₦300 million - **Cash Flow from Operations (C):** ₦200 million - **Total Assets last year (\(A_{t-1}\)):** ₦2 billion - **Revenues this year (\(\text{REV}_t\)):** ₦1,500 million - **Revenues last year (\(\text{REV}_{t-1}\)):** ₦1,400 million - **Receivables this year (\(\text{REC}_t\)):** ₦100 million - **Receivables last year (\(\text{REC}_{t-1}\)):** ₦80 million - **Property, Plant, and Equipment (\(PPE_t\)):** ₦600 million ### Step-by-Step Calculation 1. **Calculate Total Accruals (TA):** \[ \text{TA}_t = \text{NI}_t - \text{CFO}_t = ₦300m - ₦200m = ₦100m \] 2. **Normalize Total Accruals by Total Assets from Last Year:** \[ \frac{\text{TA}_t}{\text{A}_{t-1}} = \frac{₦100m}{₦2,000m} = 0.05 \] 3. **Calculate Change in Revenues (ΔREV):** \[ \Delta \text{REV} = \text{REV}_t - \text{REV}_{t-1} = ₦1,500m - ₦1,400m = ₦100m \] 4. **Calculate Change in Receivables (ΔREC):** \[ \Delta \text{REC} = \text{REC}_t - \text{REC}_{t-1} = ₦100m - ₦80m = ₦20m \] 5. **Estimate Non-Discretionary Accruals (NDA):** Using simplified coefficients (\(\alpha = 0\), \(\beta_1 = 1\), \(\beta_2 = 0.1\)): \[ \text{NDA}_t = \left( \frac{\Delta \text{REV}_t - \Delta \text{REC}_t}{\text{A}_{t-1}} ight) + \beta_2 \left( \frac{\text{PPE}_t}{\text{A}_{t-1}} ight) \] Substitute the values into the equation: \[ \text{NDA}_t = \left( \frac{₦100m - ₦20m}{₦2,000m} ight) + 0.1 \left( \frac{₦600m}{₦2,000m} ight) \] \[ \text{NDA}_t = \left( \frac{₦80m}{₦2,000m} ight) + 0.1 \left( \frac{₦600m}{₦2,000m} ight) \] \[ \text{NDA}_t = 0.04 + 0.03 = 0.07 \] 6. **Calculate Discretionary Accruals (DA):** \[ \text{DA}_t = \frac{\text{TA}_t}{\text{A}_{t-1}} - \text{NDA}_t \] \[ \text{DA}_t = 0.05 - 0.07 = -0.02 \] ### Interpretation of the Results: - **Total Accruals**: The normalized total accruals are 0.05. - **Non-Discretionary Accruals**: The normalized non-discretionary accruals are 0.07. - **Discretionary Accruals**: The discretionary accruals are -0.02. A negative discretionary accrual suggests that there is a degree of earnings management, potentially indicating manipulation to understate earnings. Conversely, if the discretionary accruals were positive and significantly large, it might suggest earnings inflation. ### Conclusion: By breaking down the financial data of a hypothetical Nigerian bank into total, non-discretionary, and discretionary accruals, you can

Can I do this calculation using E-views instead of STATA?

very good

فيديو فاشل

Hello Mr. Abobaker, please I sent you several emails, still waiting for your response. Kindly check and revert. Its help needed on your EM videos especially the do file commands. Thank you.

Thank you for this video, please can I have the files, espcially the commands to be used on Stata. Thank you

In which software you are entering these commands ???

السلام عليكم. لو ممكن طريقة حساب نموذج جونز من اول لم اجد الفيديو. وهل يكون التحليل تسلسل زمني ام panel ؟على العلم ان بيانتي ربع سنويه كيف يمكنني التحليل? شكرا

روووووووعة روووووووعة روووووووعة ❤ احسنت ❤

Hi Professor. Thank you for this interesting video. I have a question. I want to estimate a simultaneous equations model, but one dependent variable is a discrete variable with three categories. I want to applied an ordered probit to model it. How can I process to estimate this kind of model? Thanks

Can you share the Do File please

Hey thank you for this video, it's really helpful but you have done this analysis for cross-sectional data but I want to run it for panel data. So please can you suggest me how the code will change.

Hello, can you send me the do file so that I can use it in my research analysis.

Subscribed! Can you share the code?

How to export all items. It only exports 3000

ارجوا المعادلة

Q1: How can i find out my endogenous variables? as one test is showing them as endogenous and other showing them not. how to verify it?? Q2: how to test combinely (collectively ) endogeneity in model as i have apply gmm for my analysis as other fe/re is not suitable. i have no prob of hetro and auto.

Hello Dr I just wonder where can I find the video for calculating the 4 parts first as this is where I am stuck.

hello sir could you please share your email id or linkedin Id ??

Sir, why you have deleted earnings management videos seriously it was useful for all of us

hello sir, why you have deleted your videos it was really very useful

Hello, sir. I find it extremely valuable for comprehension. Could you kindly provide me with the DO files for calculating discretionary accruals ?

this doesn't work when you have 40 sheets to merge

AOA very informative lecture. Plz sir send me do file concerned theses estimation of earning management .

Thank you!!!

شكرا 👍

Hi how to add ,many significance star level in the table?

it seems that asdoc cant be downloadad on my side

Thank you so much for making this video. God bless you.

Hello, I have a question after watching the video. I will use the current Stata program to estimate random reserves using the Jones 1991 or 1995 model. I saw "Jones model 1991 estimation" and "Jones model 1991 estimation by industry and year" among the videos you posted." If I try to estimate discretionary accruals through cross-sectional analysis by industry-year, can I do it like a secondary video?? I wonder what you got in video 1 and what you got in video 2. Please understand that the message is weird because I am not good at English.

Hello, I have a question after watching the video. I will use the current Stata program to estimate random reserves using the Jones 1991 or 1995 model. I saw "Jones model 1991 estimation" and "Jones model 1991 estimation by industry and year" among the videos you posted." If I try to estimate discretionary accruals through cross-sectional analysis by industry-year, can I do it like a secondary video?? I wonder what you got in video 1 and what you got in video 2. Please understand that the message is weird because I am not good at English.

Dear Abo bakhir Thanks so much for your helpful videos on REM. Would you kindly share with me the stata codes. Also would record this video with your voice so that we can all understand it better. Thanks again

If I use a different IV package, the results confirm the endogeneity problem. How would I confirm the situation?

Sir what is this ABS_AEM, l.ABS_AEM and l.ROA . Can you please clarify

hello sir i am working on co2 emission , corporate governance and firm performance my dependent variable is co2 independent is corporate governance and firm performance is control variable ho to find out instrumental variable from my data set to solve endogenety issue

Can you show lists of indexes and names of companies?

Hello, thank you so much for the useful videos. I tried to the jones model as shown below but nothing is changing in my dataset: egen industry = group(SICCategory) gen Jones_1991 = . forval y = 2011(1)`2021' { forval x = 1(1)`9'{ display `i' display `y' reg Dependent beta_one One_over_TOTASS ROA_Net_IncomeLagged INFLATIONLAGGED GDPLAGGED if `i'== industry & `y'== YearEnded, noconstant predict r if `i'== industry & `y'== YearEnded, resid replace Jones_1991 = r if `i'== industry & `y'== YearEnded drop r } } Could you kindly let me know what's wrong with this code? Thank you so much in advance

Your video is a gem.

Hi sir , can we download dividend for an entire country one time ?

Is it possible to export more than 3000 observations

When i try to evaluate the impact of X(indep var) on EM, should i use the residuals as a Y (dependant) variable ?

good evening sir, first of all I would like to thank you for your efforts to help us. I have a question, in my case the dependent variable is AEM and the independent variable is ESG, the exogenous variable is still AEM? I have to calculate the lagged and look in the correlation matrix to find other IVs like in the video? Thank you

thank u very much . a very helpful video

this is useless. how do you merge them into one dataset is the question.

Jazak Allah khair, Can you send the code for models?

HOLLY FK JESUS! AS A NOOB I JUST WANT TO SAY "GOOD BLESS YOU, NOW I CAN EDIT THIS ENTIRE SHIT!"

6:21 look correlation matrix to find out factors correlated to endogenous variable Y2 but not affect dependent variable Y1

الله يسعدك و يوفقك

Amazing video. Thankyou so much for such crisp and to the point explanations.