Social capital and earnings management in small and medium firms
Juan Pedro Sánchez-Ballesta and
José Yagüe
Accounting Forum, 2022, vol. 46, issue 2, 191-214
Abstract:
In this study we examine the association between social capital and earnings management in small and medium firms (SMEs). Social capital, i.e. the community’s norms and networks, may play a role as an informal and external disciplining mechanism of managers and, therefore, affect earnings management practises in small and medium firms, less subject to formal internal and external monitoring than larger firms. We implement a cross-region analysis by using a sample of Spanish SMEs and employ three measures that consider sociological and economic dimensions of social capital: an index of social capital based on economic relationships and proxies for trust and civic engagement. We find a negative association between the proxies for social capital and earnings management. Hence, our findings suggest that managers of small and medium firms headquartered in regions of higher social capital are less likely to manage reported earnings. However, our findings also reveal that the relationship between social capital and earnings management practises in private SMEs depends on firm size.
Date: 2022
References: Add references at CitEc
Citations:
Downloads: (external link)
http://hdl.handle.net/10.1080/01559982.2021.1935107 (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:taf:accfor:v:46:y:2022:i:2:p:191-214
Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/racc20
DOI: 10.1080/01559982.2021.1935107
Access Statistics for this article
Accounting Forum is currently edited by Carol Tilt
More articles in Accounting Forum from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().