The impact of financial crisis on earnings management: evidence from EU-25

Luísa Andreia Serra Costa (), António de Melo da Costa Cerqueira () and Elísio Fernando Moreira Brandão ()
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Luísa Andreia Serra Costa: FEP-UP, School of Economics and Management, University of Porto
António de Melo da Costa Cerqueira: FEP-UP, School of Economics and Management, University of Porto
Elísio Fernando Moreira Brandão: FEP-UP, School of Economics and Management, University of Porto

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: This study examines the relationship between the financial crisis and earnings management of non-financial listed companies from 25 countries which belonged to the EU in 2006, over the period 2006-2014. Also, I intend to study whether the dividend distribution is motivation for companies to earnings management. In this empirical work, we use the discretionary accruals as a proxy of earnings management and the results were obtained using the OLS model. Our results suggest that earnings management by firms is lower in periods of financial crisis and firms that pay dividends have no tendency to earnings management.

Keywords: Earnings management; Financial crisis; Dividend distribution; Accruals (search for similar items in EconPapers)
JEL-codes: G01 M41 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2016-10
New Economics Papers: this item is included in nep-cfn and nep-eur
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