Futures, provisional sales, and earnings management in the global gold mining industry

Alessandro Paolo Rigamonti, Giulio Greco and Alessandro Capocchi

Finance Research Letters, 2024, vol. 59, issue C

Abstract: This study investigates the impact of futures on earnings management in the gold mining industry. Using quarterly data from a global sample of gold firms between 2003 and 2019, we find evidence of income-increasing accruals and real earnings management during contango periods (when futures price exceed the current spot price). Conversely, gold firms use income-decreasing accruals and real earnings management during backwardation periods (when the current spot price exceeds the futures price). This study contributes to the literature with evidence on futures as determinants of earnings management, as well as on the process through which managers smooth earnings.

Keywords: Earnings management; Future; Gold; Interim reporting (search for similar items in EconPapers)
JEL-codes: E32 G3 Q02 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:59:y:2024:i:c:s1544612323011807

DOI: 10.1016/j.frl.2023.104808

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