How much can we trust the financial report?

Shaomin Li, Seung Ho Park and Rosey Shuji Bao

International Journal of Emerging Markets, 2014, vol. 9, issue 1, 33-53

Abstract: Purpose - – The success and reliability of business transactions and research in emerging markets depend on the quality of financial information. Due to the institutional and historical backgrounds, financial information provided by firms in emerging markets has often been questioned for their accuracy. This study aims to examine the reliability of financial information through various descriptive and statistical analyses in major emerging markets, including Brazil, Russia, India, and China (the BRICs). Design/methodology/approach - – The authors use firm-level data from the BRIC countries and apply statistical models to identify patterns of profit misreporting by firms in these countries. Findings - – The results show significant and systemic signs of misreporting of financial information in these countries, particularly in China and Russia, which are further examined to understand the possible reasons behind their more severe misreporting. Originality/value - – The study then concludes with practical and specific recommendations for investors, managers, and policy makers on how to detect and avoid potential risks due to inaccurate financial information and improve the overall quality of decision making.

Keywords: Corporate governance; Earnings management; BRIC (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ijoemp:ijoem-09-2013-0144

DOI: 10.1108/IJoEM-09-2013-0144

Access Statistics for this article

International Journal of Emerging Markets is currently edited by Prof Ilan Alon

More articles in International Journal of Emerging Markets from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().