The Impact of Secrecy and Collective Intelligence on Accrual Earnings Management: International Evidence

Raida Chakroun and Abdellatif Adem

Chapter 7 in Banking Resilience:New Insights on Corporate Governance, Sustainability and Digital Innovation, 2024, pp 227-263 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This work aimed to examine the influence of national culture measured by secrecy and collective intelligence on accrual-based earnings management (EM). This research has two contributions. First, it is focused on collective intelligence, a concept that is little approached by the previous literature. Second, this study aimed to fill a gap in the literature by using cultural dimensions than previous studies. Here, we used a sample of 30 countries observed between 2000 and 2009. Accruals were used to measure EM, secrecy (SEC) was used to measure the national culture, and intelligence quotient (IQ) was used to measure collective intelligence. The results revealed a positive and significant relationship between SEC and EM. The same result was found for the relationship between IQ and EM. The principal implication of these results is that auditors, standards setters, international market participants, and policymakers need to consider the effects of SEC and collective intelligence on financial reporting. More specifically, these actors should scrutinize the financial reports more in cultures characterized by high levels of SEC and collective intelligence.

Keywords: Corporate Governance, Board Characteristics, Board Structure, Banking Institutions, Historical Literature Review, Financial Crisis, Bank Risk, CEO, Corporate Social Responsibility, CSR, Bank Efficiency, Board Governance, Board Size, Board Independence, Gender Diversity, Blau Index, Risk-adjusted Bank Performance, Tobin's Q, Return-on-Risk-Adjusted-Capital, Sharpe Ratio, Sortino Ratio, Board Diversity, Bank Risk, Bank Performance, Cost Efficiency, Bank Stability, Cultural Openness, Women Directors, Foreign Directors, Directors Educational Level, Islamic Banks, Board Diversity, Gender Diversity, Gender Quota, Emerging Economy, Bank Outcomes, Attendance, Board Effectiveness, Private Banks, Public Sector Banks, India, Corporate Social Responsibility, ESG, Sustainable Finance, Responsible Investing, Socially Responsible Banks, Risk Management, Stakeholder Engagement, Financial Stability, Sustainability, Firm Value, Climate Finance, Policy Uncertainty, Financial Stability, Climate Risk, Bibliometric Analysis, Financial Markets, Financial Assets, Asset Pricing, Capital Flows, Sustainability, Accruals, Earnings Management, Accounting Value, National Culture , Cultural Dimensions , Collective Intelligence , Secrecy, Intelligence Quotient, International Accounting, Covid-19, Pandemic, Impact, Risk, GCC Banks, GCC Islamic Banks, Conventional Banks, Profitability, Capitalization, Resilience, Asset-based Indicators, Bank, China, Density, Diversification, FinTech, Focus, Income-Based Indicators, Kernel, Quantile Regression, Big Data, Economic Capital, Emerging Markets, FinTech, GARCH-M (1; 1), GCC Financial Markets, Liquidity Risk, Reinforcement Machine Learning, Risk Management, Portfolio Management, Liquidity-Adjusted Value at Risk, Risk Metrics, Risk Spillover Effects, Internet Finance, GARCH Models, VaR Models, CoVaR Models, Securities Firms, COVID-19, Systemic Risks, China, Regulatory Reporting, Systemic Risk, Financial Stability, SupTech, RegTech, Financial Reporting, Algorithmic Data Standards, Blockchain, Financial Crisis, BCBS 239, Banks, Gulf Cooperation Council (GCC), Political Connections, Trade-Off Theory, Pecking Order Theory, Capital Structure, Risk, Profitability, Speed Of Adjustment, Generalized Method of Moments (GMM), Flash Crash, High Frequency Traders, Regulatory Framework, Algorithms, Algorithmic Trading (AT), Financial Market, Capital Market, (search for similar items in EconPapers)
JEL-codes: G21 G3 G34 (search for similar items in EconPapers)
Date: 2024
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