Model
The model according to Chung, Firth, and Kim
(2005) is selected because this model explains both
the effect of individual independent variable to
dependent variable and the effect of the interaction
of independent variables to dependent variable.
Moreover, it takes in to account the effect of factors
(control variables) to dependent variable. Modified
Jones equation is used to find the Discretionary
accounting accruals (DAC). Modified Jones is the
best among the 5 choices as explained earlier. The
model is set below:-