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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

Case study
Publication date: 29 November 2023

Marcia Lorena Rodríguez-Aldana

The student will examine from a systemic perspective qualitative information from a company to propose improvements to its business model.

Abstract

Learning outcomes

The student will examine from a systemic perspective qualitative information from a company to propose improvements to its business model.

Case overview/synopsis

After working for more than 10 years with a global company, in January 2006 the Guadalajara-based jewelry SME, Divine Jewelry Co. (DJC), was facing liquidity problems, overstock and a debt from a bank loan, among others. The planned expansion of DJC, a family business founded in 1980, had resulted in just the opposite. Daniel, the owner and CEO of DJC, was determined to reverse the company's precarious situation as soon as possible. Some of the questions he asked himself centered on what actions he should take to pay off liabilities and try to survive in the industry his business had held a place in for 25 years. Daniel wondered whether, to pay off debts and have sufficient liquidity to have working capital and move forward, it would be enough to make efforts to recover those clients they had stopped serving, along with getting new ones. In addition, he thought it was necessary to formulate a plan to use the remaining proceeds from the sale of the property if they had to dispose of it. The case is about analyzing the strategic management of a company, specifically its business model, considering the context of its industry. The case also illustrates the problems that arise from focusing on serving a single client.

Complexity academic level

The case “Divine Jewelry Co: From Expansion to Survival” has been designed to be used by university students in initial management or strategic management courses on the following topics: Business modelsPorter's Five Forces ModelFormulation of strategies

Supplementary Material

Teaching notes are available for educators only.

Subject code

CSS11: Strategy.

Details

Emerald Emerging Markets Case Studies, vol. 13 no. 4
Type: Case Study
ISSN: 2045-0621

Keywords

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