Does Financial Crisis Cause Earnings Management?

Franceschetti, Bruno Maria

doi:10.1007/978-3-319-54121-1_5

Cited by 3 publications

(3 citation statements)

References 66 publications

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“…Prior research uses different periods for GFC in their studies. The effects of global financial crisis Franceschetti (2018) argues that choosing cut-off periods for studies on GFC likely to influence the results. Some studies on GFC use three cut-off years: 2008 by Vladu (2013), 2009 by Iatridis and Dimitras, (2013) and 2010 is used by Kousenidis et al (2013) cited in Franceschetti (2018).…”

Section: Independent Variables Earnings Managementmentioning

confidence: 99%

The effects of global financial crisis on the relationship between CEO compensation and earnings management

Assenso-Okofo

Ali

Ahmed

2020

IJAIM

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Purpose This paper aims to examine the effects of global financial crisis (GFC) on chief executive officers’ (CEO) compensation and earnings management relationship. Specifically, the authors examine whether the recent financial crisis had moderated the relationship between CEO bonus and discretionary accruals. Design/methodology/approach The authors use panel data for 1,800 firm-year observations (over a period of six years from 2005 to 2010) and use univariate and multivariate tests to test their hypothesis. The authors divide the period into pre-crisis, during-crisis and post-crisis periods to examine how the different financial crisis periods affect the relationship between CEO compensation and earnings management. Various alternative tests including endogeneity test suggest that the results are robust. Findings The authors’ multivariate results indicate that the relationship between CEO’ compensation and earnings management changes because of the GFC. Practical implications The findings, therefore, justify more monitoring and scrutiny to limit the existence of opportunistic managerial behaviour and for the appropriate designing of CEO compensation packages during abnormal economic circumstances. Originality/value So far as the authors’ knowledge goes, this is the first study which examines the relationship between CEO compensation and earnings management during GFC.

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Section: Independent Variables Earnings Managementmentioning

confidence: 99%

The effects of global financial crisis on the relationship between CEO compensation and earnings management

Assenso-Okofo

Ali

Ahmed

2020

IJAIM

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“…Porém, a prática de GR não pode ser confundida e nem considerada uma fraude. O GR ocorre nos limites das normas contábeis, já a fraude constitui uma violação das regras e Princípios da Contabilidade, porém a magnitude do gerenciamento pode posteriormente se configurar como uma ação fraudulenta (Franceschetti, 2018).…”

Section: Gerenciamento De Resultados (Gr)unclassified

A sinalização do gerenciamento de resultados por meio da responsabilidade social corporativa no Brasil

Júnior

Filho

2022

R. Contemp. Contab.

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Objetivou-se estudar a relação entre a Responsabilidade Social Corporativa (RSC) e o nível de Gerenciamento de Resultados (GR), sob a ótica da Teoria da Sinalização. A literatura aponta que os gestores podem apresentar a RSC de forma ética ou oportunista. Utilizou-se como amostra as empresas de capital aberto listadas na [B]3, não financeiras, entre o período de 2010 a 2018. Obteve-se o nível de GR pelo módulo dos resíduos (GRit) do modelo de Pae (2005), estimado por System Generalized Method of Moments (GMM). Captou-se o nível de divulgação de RSC por meio da análise de conteúdo dos Relatórios de Sustentabilidade, Formulários de Referência e Notas Explicativas, analisando a presença de indicadores econômicos, ambientais e sociais, baseados em Callado (2010) e Murcia e Wuerges (2011). Identificou-se que a presença de maiores informações de cunho ambiental podem sinalizar possíveis manipulações nos lucros, servido como um alerta para os stakeholders.

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“…Thus, it can be said that there is a relationship between earnings management and financial distress. But the findings by Franceschetti (2017) specifies that financial crisis does not influence earnings management. However, there is a connection between a troubled firm and a deceitful company.…”

Section: Introductionmentioning

confidence: 99%

Impacts of Earnings Management on Corporate Failure: A Case Study of Wirecard

2021

ijafr

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The purpose of this study is to find out whether earnings management has impacts on bankruptcy risk based on the data of Wirecard Company. The M-score of Beneish's (1999) model has been used to detect the probability of earnings management. On the other hand, the Z"-Score of Altman's (1968) model has been applied to detect Corporate Failure. Both the models are widely used models in their respective fields. The data from 2002 to 2019 were collected from the annual reports of the Wirecard Company. The result of M-Score indicates that earnings management has a significant impact on the corporate failure (Z-Score) of the company. This finding specifies that a financially distressed firm adopts earnings manipulations. The finding also implies that earnings manipulations harm the financial health of a firm. According to the findings, it can be suggested that to know the financial aspects of a company, both the (Beneish M-model and Altman Z-score model) models could be used concurrently. Beneish M-model is for detecting earnings management and the Altman Z-score model is for determining corporate failure. The novelty of the study is that no study was done on Wirecard Company focusing on the association between earnings management & bankruptcy risk.

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Does Financial Crisis Cause Earnings Management?

Cited by 3 publications

References 66 publications

The effects of global financial crisis on the relationship between CEO compensation and earnings management

The effects of global financial crisis on the relationship between CEO compensation and earnings management

A sinalização do gerenciamento de resultados por meio da responsabilidade social corporativa no Brasil

Impacts of Earnings Management on Corporate Failure: A Case Study of Wirecard

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