Earnings Management and Local vs. International Accounting Standards of European Public Firms

Aussenegg, Wolfgang; Inwinkl, Petra; Schneider, Georg

doi:10.2139/ssrn.1310346

Cited by 31 publications

(23 citation statements)

References 30 publications

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“…The result supports Chen et al (2005) and Aussenegg et al (2009). These findings reinforce the belief that the cash flow from operating activities reflect the real firm's ability to generate funds.…”

Section: Resultssupporting

confidence: 78%

“…In IPO setting, Chen et al (2005) report that operating cash flows are negatively related to the degree of earnings management. Aussenegg et al (2009) find evidence that operating cash flows is able to reduce earnings management of 4,745 firms in Europe for period [1995][1996][1997][1998][1999][2000][2001][2002][2003][2004][2005]. According to these findings, the study predicts that operating cash flows is negatively associated with the degree of earnings management of Indonesian IPO firms (H2).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 96%

See 1 more Smart Citation

Audit Quality and Earnings Management In Indonesian Initial Public Offerings

Gumanti¹,

Nastiti²,

Utami³

et al. 2015

MJSS

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Section: Resultssupporting

confidence: 78%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 96%

Audit Quality and Earnings Management In Indonesian Initial Public Offerings

Gumanti¹,

Nastiti²,

Utami³

et al. 2015

MJSS

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“…Using a sample drawn from companies from 21 countries, they find that accounting amounts for non-US firms applying domestic standards are also generally of lower quality than those for non-US firms applying IAS. These results are consistent with Aussenegg, Inwinkl & Schneider (2008) for a sample of public traded firms for 15 European Member States. A lower earnings management level for IAS adopters is especially pronounced and significant for German legal origin countries (Austria, Germany, and Switzerland) and for French legal origin countries (Belgium, France and the Netherlands).…”

Section: Previous Literature and Hypothesis Developmentsupporting

confidence: 87%

Keys to reduce earnings management in emerging markets

Manzano

Conesa

Sánchez

2014

SAJBM

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This paper examines earnings quality adapted to International Financial Reporting Standards in Mexican emerging capital market and how investor protection and audit quality to override managers' incentives to engage in earnings management. We evidence that the new accounting regulation could be considered of high quality financial reporting standard because it is associated with lower earnings management. The analyses also suggest that cross-listed firms have higher quality local generally accepted accounting principles accounting information as measured by earnings management. There is also evidence that earnings of Mexican companies with Big 4 auditors are of higher quality. The results contribute to the ongoing debate on whether high standards are sufficient and effective in countries with weaker investor protection rights.

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“…As German firms are presumed to use accruals in order to smooth earnings, especially under HGB (Beckman et al, 2007), we suggest an analysis of the extent of income smoothing under HGB vs. IFRS to be of particular interest. To avoid idiosyncratic effects mentioned by Aussenegg et al (2008), we use six different measures for income smoothing which are partly modified compared to previous studies.…”

Section: Earnings Managementmentioning

confidence: 99%

International Financial Reporting Standards and Earnings Quality: The Myth of Voluntary vs. Mandatory Adoption

et al. 2009

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We revisit evidence whether incentives or IFRS drive earnings quality changes, analyzing a large sample of German firms in the period from 1998 to 2008. Consistent with previous studies we find that voluntary and mandatory adopters differ distinctively in terms of essential firm characteristics and that size, leverage, age, bank ownership and ownership concentration influenced the decision to voluntarily adopt IFRS. However, regardless of the decision to voluntarily adopt IFRS, we find that conditional conservatism increased under IFRS for both groups of adopters, while evidence does not suggest an increase in value relevance under IFRS. Results on earnings management in the post-adoption period are mixed. While income smoothing decreases for voluntary but not for mandatory adopters, discretionary accruals only decrease for mandatory but not for voluntary adopters. However, further analyses suggest that the capital market environment and the economic cycle during the adoption period seem to be a more powerful explanation for this evidence than voluntary or mandatory IFRS adoption. Therefore, we conclude that incentives to voluntarily adopt IFRS did not unambiguously dominate accounting standards in determining earnings quality in the case of German firms. Terms of use: Documents inJEL Classification: G14, M41, M43, M44, M47

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Earnings Management and Local vs. International Accounting Standards of European Public Firms

Cited by 31 publications

References 30 publications

Audit Quality and Earnings Management In Indonesian Initial Public Offerings

Audit Quality and Earnings Management In Indonesian Initial Public Offerings

Keys to reduce earnings management in emerging markets

International Financial Reporting Standards and Earnings Quality: The Myth of Voluntary vs. Mandatory Adoption

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