Culture's consequence: The relationship between income-increasing earnings management and IAS/IFRS adoption across cultures

Joseph C. Ugrin, Terry W. Mason and Anna Emley

Advances in accounting, 2017, vol. 37, issue C, 140-151

Abstract: Research has shown that earnings management has increased amongst firms in Europe post-IFRS adoption, but the association between IFRS adoption and earnings management is not uniform across countries. We propose the culture of a firm's country of origin relates significantly with changes in earnings management pre- and post-IFRS adoption. We test our proposition using the Hofstede Model of Cultural Dimensions and find a significant increase in income-increasing earnings management after IFRS adoption amongst firms based in countries that are more power distant, uncertainty avoidant, individualistic, short-term oriented, and indulgent.

Keywords: Culture; Earnings management; IFRS (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:37:y:2017:i:c:p:140-151

DOI: 10.1016/j.adiac.2017.04.004

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