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The Greek insider trading and market manipulation (market abuse) regime is in the process of transformation by the new Code on Capital Market, which internalises the provisions of the 2003 Market Abuse Directive. The new market abuse prohibition follows an effect‐oriented approach, which, in conjunction with the application of strict administrative law sanctions, is likely to expand the scope of liability. Though, however, the new market abuse regime will facilitate the prosecution of insiders and manipulators, a number of issues are left open to discussion. Consequently, supervisory authorities and courts are required to display particular care in the interpretation and application of the new regime in order to ensure effective enforcement.

The purpose of this study is to empirically investigate the Greek firms' earnings management policies compared with debt, taxation and the financial crisis.

In this paper, the authors show that existed measures of real earnings management, whether corrected for performance or not, rely crucially on strong assumptions. The authors provide a novel modelling that permits panel structure so as to correct for heterogeneity across firms while permitting to determine endogenously the number of underlying firm-groups in the data generating process.

The empirical results indicate that Greek firms are likely to reduce earnings manipulation activities when they face liquidity risk. Taxation and financial crisis have a negative and positive effect on earnings management, respectively.

The effect of debt, taxation and financial crisis on earnings management has never been investigated in Greece. The empirical results offer valuable information to shareholders and investors as they can understand how some main factors, such as debt, taxation and financial crisis, influence firm's accounting practices.

The purpose of this research paper is to investigate the role of corporate governance in earnings management behaviour by US listed banks during the era of the Sarbanes‐Oxley Act (2003‐2008).

The paper examines the issue of accounting quality and corporate governance within banking corporations through the use of two different measures of earnings management, namely small positive net income and the difference between discretionary realized security gains and losses and discretionary loan loss provisions (LLPs), by applying a corporate governance index estimated from 63 governance provisions.

The research found convincing evidence that banks with efficient corporate governance mechanisms report small positive income to a lesser extent than banks with weak governance efficiency. Also well‐governed banks engage less in aggressive earnings management behaviour through the use of discretionary loan loss provisions and realized security gains and losses.

The findings could prove to be valuable to investors since they must take into consideration the efficiency of each bank's corporate governance and demand supplementary information in order to reach a better investment decision when earnings are not highly informative.

The findings could prove to be useful for regulators since they are responsible for the acceptable level of corporate governance standards. Thus, they must consider strengthening governance mechanisms either though new legislation or stronger enforcement where earnings management is of such magnitude to that serious impedes information transparency and quality.

The present study aims to bridge a gap in the literature by investigating corporate governance and earnings management behaviour during a period of transition to an intensively legalized governance environment (SOX Act). The results contribute further evidence to the ongoing debate about the effectiveness of established corporate governance mechanisms.