Purpose - This study examines the earnings quality of private-subsidiary firms using a large sample data from India. Design/methodology/approach - The impact of parent-subsidiary relationship on earnings quality is examined using two common proxies. Findings are robust to alternative research...

This study investigates the impact of US political sanctions on the earnings management practices of Iranian listed firms. Employing a difference-in-differences methodology and utilizing empirical data from 2013 to 2022, the study demonstrates that sanctions do not significantly influence...

The coronavirus pandemic has caused the world's worst crisis. No other situation in recent history has had such a negative impact on the global economy. Consequently, companies have been forced to adapt to the new circumstances and strive in this drastically changing world. The objective of this...

This paper aims to analyse the mitigating effects of external audit quality (EAQ) factors on earnings management (EM) practices. Data were collected from firms listed on Bursa Malaysia's main market, covering the years 2011 through 2022. Panel regression was employed to analyse the data. The...

One of the key components of corporate governance frameworks, the audit committee is a potent instrument for controlling and supervising earning management. It might significantly affect how decisions about internal firm-board monitoring are made. The purpose of this study was to investigate the...

The main source of financing is bank loans for Portuguese small and medium-sized entities (SMEs), which implies several constraints to obtaining additional funds. Relying on the argument of Positive Accounting Theory (PAT) that accounting choices are not neutral and on Agency Theory that...

Purpose The present research conducts a thorough review of published literature relevant to earnings management (EM) practices in family firms (FFs), utilizing the Scopus database, intending to identify potential directions for future research. Design/methodology/approach Through a systematic...

Accruals are regarded as investments in working capital and are an integral component in the growth process of firms. By assuming asymmetry of information among investors when predicting the returns on such investments, investors are exposed to adverse selection problems. Consequently, in market...

We propose a novel discretionary accruals (DA) measure in the unexplored dimension of non-current accruals. We show that our measure (DA-NC) can improve the forecasting performance of fraud prediction models that rely on conventional current accruals-based DA measures. Analysing accounting...

This paper examines the implication of investor sentiment for the pricing of discretionary or abnormal accruals. We consider a setting where the market-wide investor sentiment information can provide a profitable trading strategy to generate an excess risk-adjusted return from abnormal accrual...

Prior literature finds that cash flows are more persistent than accruals. We show that this finding arises from empirical specifications that do not completely incorporate non-current accruals and do not account for accrual estimation errors. We develop a specification that addresses these two...

In this study, we investigate why earnings underperform relative to cash flows in explaining future cash flows. Using analytical and empirical analyses of the components of R2 values, we demonstrate an ‘opposing covariances effect’ in which covariances of opposite sign are summed and thus...

This study aims to examine whether family control has a positive effect on earnings management of manufacturing companies and whether leverage weakens the positive effect of family control on earnings management. This study uses panel data for the 2015-2019 observation year. The research...

The relationship between Earnings Management (EM) and Corporate Social Responsibilities (CSR) has raised a considerable number of attentions, especially, in financial and accounting field since they determine firms' performance as well as market positioning. On the contrary, in an emerging...

The validity of the use of financial statements as a source of information for detecting financial distress is questionable because of the opportunistic behaviour of the company’s management. This study aims to analyse the effect of accrual earnings management, real earnings management, and...

The purpose of this paper is to investigate whether audit firm reputation provides insight into financial reporting quality of listed companies in Vietnam. Earning management measured by accrual earning management and real earning management is compared between firms audited by Big 4 auditors...

This study investigates whether the provision of non-audit services (NAS) is associated with accounting quality and whether political connection moderates the relationship between the NAS and accounting quality. The sample includes 2,245 firm-year observations from Malaysia during the period...

The present study utilizes agency theory and the upper echelons theory (UET) to investigate whether there is a moderating effect of family ownership concentration (FOWC) on the association between CEO demographic attributes and two forms of earnings management (EM), specifically accruals...

The purpose of this study is to examine the effectiveness of clawback to minimize earnings management due to moral disengagement tendencies. To understand the phenomenon of earnings manipulation, as well as the propensity for moral disengagement, we turn to the agency theory and the social...

This study investigates the relationship between environmental, social, and governance (ESG) scores and potential tendencies to manipulate the earnings of telecommunication companies. We assumed a negative relationship between ESG scores and earnings management since the companies with higher...

While financial statements are the primary source of information about a firm, they tend to be under earnings management practices, namely to avoid paying tax. Therefore, we aim to examine whether taxes still affect earning persistence in an era of prevalent digital information. For that...

Motivated by the continued debate about the costs and benefits of mandatory recognition and disclosure of derivative instruments and hedging activities as required by Statement of Financial Accounting Standard No. 133 (SFAS 133), we investigate whether SFAS 133 influences firms' income smoothing...

We examine the role of firms’ life cycle stages on accrual quality. We expand evidence from prior studies that investigate the properties of firm life cycle and accrual quality in an integrated approach. We find that growth and mature firms report higher quality of accruals than firms in the...

Using a sample of 3.808 non-financial European Union listed companies from 2011 to 2020, this study extends previous research by empirically examining how board gender diversity affects the magnitude of earnings management. The results support the predicted (negative) relationship between female...

This bibliometric analysis of earnings management (EM) literature work published between 2000 and 2022 sheds light on the growth of knowledge and research in the field. The study analyzed 1383 papers from the Scopus Core Collection database and evaluated various factors such as year of...

We examine the relationship between business strategy typologies and managers' involvement in accrual earnings management (AEM) and real activities manipulation (RAM). Furthermore, we investigate whether prospectors (defenders) show a lower (higher) preference for earnings management than...