The Relationship Between Sustainability and Earnings Management: A Study on Oecd Countries

Abstract

This study aims to investigate the relationship between earnings management and sustainability performance of publicly traded (other than financial companies) companies in OECD countries. We analysed this in two periods, specifically 2000-2009 and 2010-2020 in founding member countries of OECD by using Panel Data Analysis techniques. The increase in sustainability performance data led to a natural break point in the analysis. The findings show that there is a statistically significant relationship between sustainability performance and earnings management with all its sub-components revealing that an increase in sustainability performance leads to a decrease in earnings management.