Assessing earnings management in european publicly traded firms


Autoria(s): Cerqueira, António; Pereira, Cláudia Maria
Data(s)

29/09/2016

29/09/2016

2016

Resumo

We investigate if investors may benefit from using the accruals quality measure to assess the level of earnings management exercised by firms when preparing their accounting statements. More earnings management is expected to be associated with high information asymmetry among stock market participants because it makes earnings information less precise, thus providing an information advantage to informed investors relative to liquidity traders. Our results based on a sample of European publicly traded firms are consistent with a positive association between earnings management and information asymmetry. However, given some previous studies suggesting that accruals based measures may be noisy indicators of earnings management we further develop and test a method to enhance the performance of accruals quality in detecting earnings management.

Identificador

http://hdl.handle.net/10400.22/8512

Idioma(s)

eng

Direitos

closedAccess

Palavras-Chave #Earnings management #Information asymmetry #Accruals quality
Tipo

article