Accrual-based and real earnings management before and after IFRS adoption: the case of Greece

Purpose – The purpose of this study is to examine the use of accrual-based vs real earnings management (EM) by Greek firms, before and after the mandatory adoption of International Financial Reporting Standards (IFRS). The research is motivated by the fact that past studies have indicated the existence of significant levels of EM for Greece in particular before IFRS. Design/methodology/approach – Accrual-based earnings management (AEM) is examined by assessing performance-adjusted discretionary accruals, while real earnings management (REM) is defined in terms of abnormal levels of production costs, discretionary expenses, and cash flows from operations, for a three-year period before and after the adoption of IFRS in 2005. Findings – The authors find evidence on a statistically significant shift from AEM to REM after the adoption of IFRS, indicating the replacement of one form of EM with the other. Research limitations/implications – The validity of the results depends on the ability of the empirical models used to efficiently capture the existence of AEM and REM. Practical implications – IFRS adoption aims to improve accounting quality, especially in countries with high need for such an improvement; however, the tendency to substitute one form of EM with another highlights unintended consequences of IFRS adoption, which do not improve the informational content of financial statements if EM continues under different forms. Originality/value – Under the expectation that IFRS adoption should lead to improvements in accounting quality, this study examines whether IFRS actually led to a reduction of EM practices for a country with exceptionally high levels of EM before IFRS, by accounting for all possible forms of EM.

Processing coordinate subject-verb agreement in L1 and L2 Greek

The present study examines the processing of subject-verb (SV) number agreement with coordinate subjects in pre-verbal and post-verbal positions in Greek. Greek is a language with morphological number marked on nominal and verbal elements. Coordinate SV agreement, however, is special in Greek as it is sensitive to the coordinate subject's position: when pre-verbal, the verb is marked for plural while when post-verbal the verb can be in the singular. We conducted two experiments, an acceptability judgment task with adult monolinguals as a pre-study (Experiment 1) and a self-paced reading task as the main study (Experiment 2) in order to obtain acceptance as well as processing data. Forty adult monolingual speakers of Greek participated in Experiment 1 and a hundred and forty one in Experiment 2. Seventy one children participated in Experiment 2: 30 Albanian-Greek sequential bilingual children and 41 Greek monolingual children aged 10–12 years. The adult data in Experiment 1 establish the difference in acceptability between singular VPs in SV and VS constructions reaffirming our hypothesis. Meanwhile, the adult data in Experiment 2 show that plural verbs accelerate processing regardless of subject position. The child online data show that sequential bilingual children have longer reading times (RTs) compared to the age-matched monolingual control group. However, both child groups follow a similar processing pattern in both pre-verbal and post-verbal constructions showing longer RTs immediately after a singular verb when the subject was pre-verbal indicating a grammaticality effect. In the post-verbal coordinate subject sentences, both child groups showed longer RTs on the first subject following the plural verb due to the temporary number mismatch between the verb and the first subject. This effect was resolved in monolingual children but was still present at the end of the sentence for bilingual children indicating difficulties to reanalyze and integrate information. Taken together, these findings demonstrate that (a) 10–12 year-old sequential bilingual children are sensitive to number agreement in SV coordinate constructions parsing sentences in the same way as monolingual children even though their vocabulary abilities are lower than that of age-matched monolingual peers and (b) bilinguals are slower in processing overall.

The acquisition of verbal paradigms in Dutch and Greek L2 children: cross-linguistic differences and inflectional defaults

Previous research with children learning a second language (L2) has reported errors with verb inflection and cross-linguistic variation in accuracy and error patterns. However, owing to the cross-linguistic complexity and diversity of different verbal paradigms, the cross-linguistic effects on the nature of default forms has not been directly addressed in L2 acquisition studies. In the present study, we compared accuracy and error patterns in verbal agreement inflections in L2 children acquiring Dutch and Greek, keeping the children’s L1 constant (Turkish). Results showed that inflectional defaults in Greek follow universal predictions regarding the morphological underspecification of paradigms. However, the same universal predictions do not apply to the same extent to Dutch. It is argued that phonological properties of inflected forms should be taken into account to explain cross-linguistic differences in the acquisition of inflection. By systematically comparing patterns in child L2 Dutch and Greek, this study shows how universal mechanisms and target language properties work in tandem in the acquisition of inflectional paradigms.