Corporate Social Responsibility, Investor Protection, and Earnings
Management: Some International Evidence |
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Authors: | Hsiang-Lin Chih Chung-Hua Shen Feng-Ching Kang |
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Institution: | (1) Department of Cooperative Economics, Commerce College, National Taipei University, 151, University Road, Sansia, Taipei, 273, Taiwan;(2) Department of Money and Banking, Commerce College, National Chengchi University, Taipei, 116, Taiwan;(3) Department of Social Welfare, National Chung Cheng University, Chiayi, Taiwan |
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Abstract: | To many, recent allegations of accounting fraud (or earnings management; EM) at Enron, coupled with similar ones at many other
corporations, are a strong indication of a serious decay in business ethics. In academics, this raises the concern between
EM and corporate social responsibility (CSR). Since it has neither been documented, nor globally tested whether CSR mitigates
or increases the extent of EM, three kinds of EM are studied: earnings smoothing, earnings aggressiveness, and earnings losses
and decreases avoidance. The extents to which financial characteristics and institutional variables have an impact on the
extent to which companies conduct EM are also tested. Our study investigates whether the CSR-related features of 1,653 corporations
in 46 countries had a positive or negative effect on the quality of their publicly released financial information during the
1993–2002 period. There is no question that with a greater commitment to CSR, the extent of earnings smoothing is mitigated,
that of earnings losses and decreases avoidance is reduced, but the extent of earnings aggressiveness is increased.
Feng-Ching Kang is a graduate student for Ph. D degree of the Department of Social Welfare at National Chung Cheng University,
Taiwan. Her research focuses on nonprofit governance, social economy, cooperative economics, organization theory and business
ethics. She received a MBA from the Department of Cooperative Economics, College of Business National Taipei University, Taiwan |
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Keywords: | G21 G34 G38 M41 |
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