Corporate anti-corruption disclosure and earnings management: evidence from East Africa community

Abstract

Purpose

Corruption and earnings management remain a serious concern across the globe. In addition, corporate disclosure of anti-corruption practices is still in its infancy in developing and emerging countries. Therefore, the purpose of this study is to examine the effect of anti-corruption disclosure (ACD) on earnings management (EM) among listed firms in the East Africa Community (EAC) partners states.

Design/methodology/approach

The study used an ACD check list developed from recent studies and the Global Reporting Initiative (GRI-205) standard on anticorruption reporting. The sample comprised 58 firms listed across EAC partner states stock/securities exchanges over the period between 2013 and 2022. The hypothesis was tested using the ordinary least squares (OLS) method.

Findings

This study found low level of ACD among the selected firms. The regression results revealed a negative relationship between ACD and EM. The results are robust to alternative panel data estimation methods and a proxy measure of EM.

Originality/value

To the best of the author’s knowledge, this is the first paper that empirically examines the effect of ACD on EM in the EAC, thus making a contribution to the existing literature.

Citation

Githaiga, P.N. (2024), "Corporate anti-corruption disclosure and earnings management: evidence from East Africa community", Journal of Financial Crime, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFC-01-2024-0016