National culture and earnings management in emerging markets: the role of IFRS mandatory adoption

Dante Baiardo C. Viana Jr., Isabel Lourenço, Marília Ohlson and Gerlando Augusto S.F. de Lima

International Journal of Managerial and Financial Accounting, 2023, vol. 15, issue 3, 316-345

Abstract: This study investigates the association between national culture and earnings management in emerging markets and analyses the role of International Financial Reporting Standards (IFRS) mandatory adoption in dampening the influence of national culture on earnings management. Based on a sample of 12,209 firm-year observations from 14 emerging markets and using several proxies for both accrual-based earnings management (AEM) and real earnings management (REM), we provide empirical evidence that firms from countries with higher levels of uncertainty avoidance, power distance, and long-term orientation, and firms from countries with lower levels of indulgence and masculinity, are associated with higher levels of earnings management. Furthermore, the empirical findings suggest that the IFRS mandatory adoption (associated with a better financial reporting system) moderates the association between cultural factors and earnings management by dampening the influence of national culture on either AEM or REM.

Keywords: national culture; earnings management; emerging countries; International Financial Reporting Standards; IFRS; accrual-based earnings management; AEM; real earnings management; REM. (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=131755 (text/html)
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:ids:injmfa:v:15:y:2023:i:3:p:316-345

Access Statistics for this article

More articles in International Journal of Managerial and Financial Accounting from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().