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Article
Publication date: 30 June 2022

Dante Baiardo Cavalcante Viana, Isabel Maria Estima Costa Lourenço and Edilson Paulo

This study analyzes the effect of the mandatory adoption of the International Financial Reporting Standards (IFRS) on the level of both accruals-based (AEM) and real earnings…

Abstract

Purpose

This study analyzes the effect of the mandatory adoption of the International Financial Reporting Standards (IFRS) on the level of both accruals-based (AEM) and real earnings management (REM) in a comprehensive sample of firms from emerging markets. It also analyzes whether this effect differs depending on the nature/extent of IFRS adoption (full versus modified).

Design/methodology/approach

Some previous studies predominantly made up of samples from developed countries suggest a substitution of AEM for REM in the post-IFRS period. The authors test whether this trade-off among the two earnings management strategies is also evident in emerging markets, based on a sample of 27,789 firm-year observations from 18 countries between 2000 and 2018.

Findings

The results suggest that IFRS adoption in emerging markets is associated with the replacement of REM by AEM, unlike previous overall evidence in developed countries where firms appear to do the opposite. The results also show that this replacement is lower in the emerging markets fully applying IFRS, when compared to those applying a modified version of these international standards.

Practical implications

Possibly due to the poor institutional environment of emerging markets, coupled with greater flexibility inherited of IFRS principles-based approach, the authors reiterate an imminent concern about IFRS encouraging substitution of REM for AEM in emerging countries, namely in those applying a modified version of IFRS.

Originality/value

While the predominant IFRS literature in emerging markets remains focused on analyzing only single-country studies, promoting clearly mixed results, the authors enhance such discussion and foster this debate on a more international level by analyzing the joint effect of IFRS in 18 emerging markets and by comparing the effect of full and modified IFRS adoption.

Details

Journal of Accounting in Emerging Economies, vol. 13 no. 3
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 5 January 2023

Douglas Andrade, Dante Viana, Vera Ponte and Sylvia Domingos

This study analyzes earnings management among Brazilian public firms during the 2016 Presidential Impeachment.

Abstract

Purpose

This study analyzes earnings management among Brazilian public firms during the 2016 Presidential Impeachment.

Design/methodology/approach

The sample comprises, as a treatment group, 721 firm-quarter observations relating to Brazilian listed firms. It also considers a control group of listed firms from Mexico, which were not affected by the exogenous shock analyzed (i.e. the 2016 Presidential Impeachment in Brazil). The firms' quarterly financial data cover the period between 2013 and 2018.

Findings

Considering several proxies related to earnings management by accruals, the main findings suggest a negative relationship between the 2016 impeachment event and the level of discretionary accruals, suggesting that Brazilian firms tended to reduce their earnings management levels during the impeachment process. The results are robust whether the control group is considered or not.

Originality/value

This study brings new empirical evidence to the literature on accounting information quality about the role of the economic and political environment in earnings management, especially in weak institution countries characterized by institutional voids and higher levels of corruption.

Details

Asian Review of Accounting, vol. 31 no. 3
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 30 March 2022

Dante Baiardo C. Viana Jr, Isabel Lourenço and Ervin L. Black

The purpose of this study is to examine the association between financial distress and accruals-based earnings management in emerging markets, and the role that auditors play in…

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Abstract

Purpose

The purpose of this study is to examine the association between financial distress and accruals-based earnings management in emerging markets, and the role that auditors play in that association.

Design/methodology/approach

This study relies on a sample of 33,455 firm-year observations from 20 emerging markets, covering a large period of analysis of 20 years. A multivariate analysis is performed by considering the level of financial distress as the dependent variable, and the accruals-based earnings management and dummies for the type of auditor as the main independent ones.

Findings

The authors predict and find empirical evidence that firms facing greater financial distress engage in income-increasing accruals-based earnings management in emerging markets, and that such engagement is lower in firms audited by Big 4 firms compared to those audited by non-Big 4 auditors. The authors also find significant differences across Big 4 audit firms in their role of constraining income-increasing earnings management strategies in firms with high levels of financial distress.

Originality/value

The study adds to previous literature by investigating the association between financial distress and accruals-based earnings management in a comprehensive sample of 20 emerging markets, by providing important overall cross-country empirical evidence that has not been addressed by previous literature. The authors also bring new knowledge by discussing the role played by the Big 4 audit firms in limiting earnings management practices by firms with high levels of financial distress. Such a limitation serves as an important external corporate governance mechanism to restrain managers’ opportunistic behaviour in firms facing financial distress – especially in emerging economies characterized overall by institutional voids.

Details

Accounting Research Journal, vol. 35 no. 5
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 13 July 2021

Dante Baiardo Cavalcante Viana Jr, Isabel Maria Estima Costa Lourenço, Marília Ohlson and Gerlando Augusto S F de Lima

This study investigates how the association between national culture and earnings management compares between developed and emerging countries.

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Abstract

Purpose

This study investigates how the association between national culture and earnings management compares between developed and emerging countries.

Design/methodology/approach

The empirical analysis relies on a sample of 6,313 firm-year observations from 11 emerging markets and 27,605 firm-year observations from 22 developed countries. The authors use ordinary least squares regression methods to test the hypotheses of the study.

Findings

Based on Hofstede's (2011) cultural dimensions, the authors find that firms from countries with a higher level of uncertainty avoidance and individualism are less likely to engage in earnings management, but the effect of uncertainty avoidance (individualism) is more (less) pronounced in the emerging countries. Moreover, the authors demonstrate that firms from emerging (developed) countries with higher levels of power distance and masculinity are less (more) likely to engage in earnings management. Finally, the authors find evidence of a trade-off between accruals-based and real earnings management in firms from countries with greater long-term orientation and an indulgence cultural dimension.

Originality/value

This paper adds to the literature by theoretically discussing and empirically analysing the role that developed and emerging countries' development plays on the effect of national culture on earnings management.

Details

Journal of Accounting in Emerging Economies, vol. 12 no. 1
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 30 November 2021

Dante Baiardo Cavalcante Viana Jr, Isabel Lourenço and Ervin Lynn Black

This study aims to analyse the association between country-level ethical judgement and earnings management and the role that firm-level enforcement and the quality of accounting…

Abstract

Purpose

This study aims to analyse the association between country-level ethical judgement and earnings management and the role that firm-level enforcement and the quality of accounting standards play in this association.

Design/methodology/approach

The analyses are based on a sample of 45,889 firm-year observations from 34 countries between 1998 and 2018. Based on the World Values Survey questionnaire, this study constructs a comprehensive index of the ethical judgement of each country.

Findings

The empirical findings suggest that firms from countries where ethically suspect behaviours are less acceptable are associated with lower levels of accruals-based earnings management and that firm-level enforcement and the quality of accounting standards dampen such association.

Practical implications

The results contribute to the debate about ethical issues in the accounting profession in an international context, adding to the sustainable development debate given that the creation of long-term value for firms is intrinsically related to business ethics and good quality financial reporting.

Social implications

When it is known that countries’ ethically-related judgements reduce the level of earnings management, actions can be taken by regulators and other stakeholders to build fairer societies with a more sustainable view, given that the quality of the financial reporting is inextricably linked to how income and wealth are distributed.

Originality/value

While previous literature documents that ethical judgement at both the individual and organizational levels matter as key determinants of the way managers are involved with unethical accounting practices, this study investigates the role of ethical judgement at the country level in explaining earnings management.

Details

Sustainability Accounting, Management and Policy Journal, vol. 13 no. 2
Type: Research Article
ISSN: 2040-8021

Keywords

Article
Publication date: 4 February 2019

Ana Lucia Manrique, Ely A.T. Dirani, Annie F. Frere, Geraldo E. Moreira and Pedro M. Arezes

Despite dealing with special educational needs (SEN) students, many teachers feel unprepared for this task. This situation reveals the urgent need for studies in different areas…

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Abstract

Purpose

Despite dealing with special educational needs (SEN) students, many teachers feel unprepared for this task. This situation reveals the urgent need for studies in different areas, directed toward the inclusion of students in regular classrooms. Therefore, a diagnosis about the situation of inclusive education and the resources available in schools offering regular teaching becomes of paramount importance. Therefore, the purpose of this paper is to present the results of an investigation that sought information on pedagogical work in inclusive education and in the use of support materials by teachers of basic education in Brazil and Portugal.

Design/methodology/approach

In order to carry out this investigation, a questionnaire was developed by a partnership between researchers from the Pontifical Catholic University of São Paulo, Brazil and the University of Minho, Portugal, and applied to mathematics teachers. The study participants consisted of 197 mathematics teachers, working in primary school, secondary school and young people and adult education. Data collection was carried out through a questionnaire, available online and designed in Google Forms, with 48 questions (both open and closed formats).

Findings

From the results obtained, there is a clear need not only for promoting initial and further teacher training that takes into consideration the profile of this teacher, but also for promoting the development of support materials (games, software, devices and assistive technology) in a collaborative way, involving users, teachers, engineers in a way to ensure a good usability and adequate adaptability. Thus, the inclusion of SEN students in schools must not take place only with their physical integration, but also must consider their integration at social, emotional and educational levels.

Originality/value

It is understood that the teacher should receive a solid training in successful inclusion experiences in terms of technological, educational and didactic experiences. Another problem that seems to be recurrent is that support materials have been developed in a way that is somehow disconnected from the reality of the classroom. The context in which the support material is inserted is fundamental to the success of its utilization. What is more, it cannot be isolated from the individuals who will use it. It thus becomes urgent to prepare the school environment for the reality of inclusion. This involves aspects from changes in infrastructure and development of assistive technology to assist the student with SEN in their learning, to the establishment of public policies that involve teacher initial and further training, specialized support and curricular discussions.

Details

International Journal of Educational Management, vol. 33 no. 2
Type: Research Article
ISSN: 0951-354X

Keywords

Article
Publication date: 27 March 2020

Rodrigo de Castro Freitas and Maria do Carmo Duarte Freitas

Lean office covers the improvement of administrative processes and information flows. In offices, one of the essential challenges is to coordinate the development of information…

1731

Abstract

Purpose

Lean office covers the improvement of administrative processes and information flows. In offices, one of the essential challenges is to coordinate the development of information management capabilities. Thus, this paper aims to identify the key factors of information management in lean office deployment contexts.

Design/methodology/approach

By adopting a qualitative approach, it consists of theoretical research that applies grounded theory's coding technique and exploits 27 scientific studies on lean office published in the past 20 years.

Findings

It identifies five key factors for managing information into an organizational structure that optimizes information flow, such as “information-seeking,” “access to information,” “information quality,” “information processing” and “use of information and communication technology”.

Research limitations/implications

Data analysis was restricted in scientific research regarding lean office deployment. Therefore, the accuracy of the concepts and categories of information management proposed in this paper can be adjusted and validated in future research, thus deepening the discussion of its findings.

Practical implications

It highlights issues for managing information in contemporary organizations such as failures in information retrieval, restrictions on access to information, lack of quality information, inadequate information processing criteria and inefficiency of information systems infrastructure.

Originality/value

It analyzes the lean office deployment from the theoretical framework of information management. Thus, it differs from other studies in this field because it is not limited to the operational aspects of lean management. Nevertheless, it shows that lean office reconfigures information flows and continually improves organizations’ strategic management.

Details

International Journal of Lean Six Sigma, vol. 11 no. 6
Type: Research Article
ISSN: 2040-4166

Keywords

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