The effect of IFRS on earnings management in Brazilian non-financial public companies

Grecco, Marta Cristina Pelucio; Geron, Cecília Moraes Santostaso; Grecco, Gerson Begas; Lima, João Paulo Cavalcante

doi:10.1016/j.ememar.2014.07.001

Cited by 94 publications

(77 citation statements)

References 88 publications

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“…For instance, the transition to I.F.R.S. restricted earnings manipulation in Brazilian firms after its complete implementation (Pelucio-Grecco et al, 2014). In this case, the more effective the regulation, the lower the possibility for the manager to opportunistically manipulate the financial statements during the elaboration process and, as a result, the better the quality of the accounting information that is disclosed.…”

Section: Institutional System and Real Activities Manipulationmentioning

confidence: 99%

Real earnings management and corporate governance: a study of Latin America

Mellado

Saona

2019

Economic Research-Ekonomska Istraživanja

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This article analyses the impact of ownership structure features and institutional settings on real activities manipulation. The analysis is based on a sample of listed companies in the underexplored Latin American market for the period of 2004-2016. Paneldata-based G.M.M. System Estimation is used in the empirical analysis. The results confirm that the monitoring role of the majority owner is crucial in mitigating managerial opportunistic behaviour. Here, opportunistic behaviour refers to engaging in real activities manipulation that reduces the informative content of financial statements. However, analysis of insider ownership revealed that managers had a negative impact on transparency. We observed that as insider ownership increases, managers engage more actively in real earnings management. We also find that the institutional ownership and the quality of the regulatory system proved to be effective mechanisms in reducing real activities manipulation. ARTICLE HISTORY

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Section: Institutional System and Real Activities Manipulationmentioning

confidence: 99%

Real earnings management and corporate governance: a study of Latin America

Mellado

Saona

2019

Economic Research-Ekonomska Istraživanja

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“…This historical innovation has received much attention from both practitioners and academics. One stream of literature examines the effects of the IFRS adoption and convergence on earnings quality (for example, Chen et al, 2010; Kabir et al, 2010;Zeghal et al, 2012;Pelucio-Grecco et al, 2014). Most of these studies focus on European and developed countries whilst research on emerging economies is very scarce.…”

Section: Introductionmentioning

confidence: 99%

The impact of IFRS-based accounting standards on earnings management: evidence from Malaysia

Fourati

Ghorbel²

2016

IJAES

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This study aims to examine the consequences of International Financial Reporting Standards (IFRS) convergence in an emerging market. More specifically, we investigate whether the adoption of the new set of accounting standards in Malaysia is associated with lower earnings management. Using a sample of 3,340 firm-year observations across three reporting periods with different levels of IFRS adoption, we provide evidence that IFRS convergence improves earning quality. In particular, we find a significant decrease in the absolute value of discretionary acccruals in the partial IFRS-convergence period (2007)(2008)(2009)(2010)(2011), whereas this effect is restrictive after the complete IFRSimplementation.

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“…In practice, there are many mechanisms that can limit this doing such as: the accounting legislations, independent audit and the good practice of enterprises which are governing (Peluci-Grecco et al, 2014). The accounting laws, essentially those made by lawful organism of capital markets, could be a means to restrict the findings manipulations.…”

Section: Introductionmentioning

confidence: 99%

“…In order to elaborate these files of synthesis, the managers are invited to make some estimations and judgments based on the interpretation of transactions and to choose through the practices and the accounting methods to adopt. Nevertheless, Peluci-Grecco et al (2014), suggested in this case, that managers could make use of the flexibility of the accounting principles to maximize their wealth at the expense of the investors.…”

Section: Introductionmentioning

confidence: 99%

The Impact of the IAS/IFRS Adoption on the Predictive Quality of Discretionary Accruals: A Comparison between the French and the British Context

Olfa¹,

Hamadi²

2015

IJEF

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The purpose of this article is to study and compare the impact of the adoption of the international standards IAS/IFRS and the legal regime of a country on the pertinence of the discretionary accruals in terms of its quality of the prediction of future operating cash flows in two contexts: The French and United-Kingdom. The findings of our study prove that the adoption of these norms has clearly improved the predictive quality of discretionary accruals in the British context. In France, such effect has been demonstrated as significant and positive for both periods. The study of the impact of the IFRS norms on the predictive quality of discretionary accruals on the two European countries of our study shows that in the British context, the association between the discretionary accruals and the future operating cash flows is more important for the companies using the international norms than in those applying the British ones. In the French context, no significant association between the discretionary accruals and the IFRS has been verified. Next, our study has spread to see the impact of the legal regime on the predictive power of discretionary accruals before and after the adoption of the IAS/IFRS norms. The findings prove that the fullness of the association between the future operating cash flows and the discretionary accruals is stronger for the enterprises which are under the British context than those under the French one.

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The effect of IFRS on earnings management in Brazilian non-financial public companies

Cited by 94 publications

References 88 publications

Real earnings management and corporate governance: a study of Latin America

Real earnings management and corporate governance: a study of Latin America

The impact of IFRS-based accounting standards on earnings management: evidence from Malaysia

The Impact of the IAS/IFRS Adoption on the Predictive Quality of Discretionary Accruals: A Comparison between the French and the British Context

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