Browsing by Subject "Abnormal accruals"

Now showing 1 - 2 of 2
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    Open Access
    Corporate Governance and Reliability of Financial Reporting in Central Government Agencies
    (Universidad de Murcia, Servicio de Publicaciones, 2022) Arcas-Pellicer, María-José; Pina, Vicente; Torres, Lourdes
    The objective of this paper is to determine the effects of the corporate governance practices of central government agencies on the reliability of nancial reporting. There has been a considerable growth of these agencies across countries, and there are no studies about the relationship between the features of their corporate governance and the level of reliability of their financial reports. This paper provides evidence of systematic upward earnings management by agencies that apply the Private Sector Chart of Accounts to improve their financial performance and to compensate for the reduction of revenues during the worst years of the financial crisis. The results also show that abnormal accruals have a significant and inverse relationship with the percentage of independent directors and women on the boards, i.e., diversity improves the reliability of the financial information of these entities.
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    Open Access
    Do auditors mitigate earnings manageme nt during economic crisis?
    (2019) Reguera Alvarado, Nuria; Fuentes, Pilar de; Laffarga, Joaquina
    This paper addresses earnings management from an international perspective. This study particularly ana-lyzes whether external auditing reduces earnings managements and, if so, whether this relationship isaffected by the economic crisis. The study employs a cross-country approach. The sample has 3,830 obser-vations from listed firms from the United States, the United Kingdom, Japan, Italy, France and Spain duringthe period 2005–2009. Panel data are used to verify the research hypotheses. The findings show that ex-ternal auditing is an important mechanism to minimize earnings management. In this sense, the Big Fourand auditor specialization helped to reduce earnings managements during the economic crisis. Moreover,long audit tenure does not contribute to mitigating discretionary accruals. The study includes implicationsfor academia, practitioners, and policymakers. It provides the literature with complementary evidence onthe external auditing and earnings management relationship and how this is influenced by the economiccrisis. The article benefits practitioners and policymakers by highlighting the most important character-istics of audit firms related to the mitigation of earnings managements. In addition, this study considersthe recent economic crisis as an important economic factor. Given that the crisis affected most countriesaround the world and caused structural changes within companies, information about the consequences ofthe crisis and how to deal with them is an important empirical question.