Financial crisis,GDP variation and earnings management in Europe |
| |
Affiliation: | 1. School of Business, Trinity College Dublin, College Street, Dublin, Ireland;2. Department of Financial Economics and Accounting II (Accounting), School of Business Administration and Economics, Complutense University of Madrid, 28223 Madrid, Spain;1. School of Accountancy, University of Nebraska-Lincoln, Lincoln, NE 68588-0488, United States;2. John F. Carroll Junior Professor Department of Accounting and Information Systems, Pamplin College of Business, Virginia Tech, Blacksburg, VA 24061, United States;3. 309-298-1152, Western Illinois University |
| |
Abstract: | The purpose of this study is to examine the consequences of the financial crisis on the European companies’ in conjunction with earnings management practice. It focuses on financially distressed companies that audited by a big 4 auditor during recession years. The study makes use of discretionary accruals as a proxy for earnings management and studies the influence of big 4 auditor, in order to shed more light on possible causes for shifting earnings. The findings of the study provide evidence that financially distressed companies that audited by a big 4 auditor exhibit lower discretionary accruals. The results reveal that Greek and Spanish companies reduce earnings management manipulation during recession. In contrast, Portuguese, Irish and Italian companies show mixed results. They tend to reduce earnings management practices, but there are reasons that influence managers’ behavior to increase earnings management. The findings of this study can be useful for both investors and standard setting authorities. |
| |
Keywords: | Financial distress Earnings management GDP Big 4 auditor |
本文献已被 ScienceDirect 等数据库收录! |
|