Earnings management and European Regulation 1606/2002: Evidence from non-financial Portuguese companies listed in Euronext
Background Since 2005, Portuguese listed companies have experienced an important institutional change, the mandatory adoption of new accounting standards (IFRS/IAS). European Union Regulation 1606/2002 made compliance with IFRS mandatory for the consolidated accounts of companies with securities tr...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Universidad de Murcia
2017-06-01
|
| Series: | Revista de Contabilidad: Spanish Accounting Review |
| Subjects: | |
| Online Access: | https://revistas.um.es/rcsar/article/view/357071 |
| _version_ | 1818778527429820416 |
|---|---|
| author | Agostinho Pereira Maria do Céu Gaspar Alves |
| author_facet | Agostinho Pereira Maria do Céu Gaspar Alves |
| author_sort | Agostinho Pereira |
| collection | DOAJ |
| description | Background
Since 2005, Portuguese listed companies have experienced an important institutional change, the mandatory adoption of new accounting standards (IFRS/IAS). European Union Regulation 1606/2002 made compliance with IFRS mandatory for the consolidated accounts of companies with securities traded on a regulated market. Existing literature suggests that accounting standards and country-specific characteristics affect the level of earnings management.
Objectives
Therefore, the purpose of this paper is to analyze how accounting standards and the mandatory adoption of IFRS/IAS affect earning management in Portuguese listed companies.
Methods
In order to do this, the paper analyze the evidence of earnings management, measured through discretionary accruals, after the adoption of IAS/IFRS by non-financial listed companies on Euronext Lisbon in the period 2005–2015. The Dechow et al. (2003)econometric model will be used, and empirical results indicate that non-financial listed companies in Portuguese stock exchange in the period 2005–2015 show evidence of discretionary accruals as a proxy for earnings management.
Results
Thus, the results suggest that after the adoption of IAS/IFRS there are still indications of earnings management in non-financial listed companies.
Conclusions
This research will achieve two distinct contributions. First, filling a gap at the national level, given that there was no such study, that considered the analyzed period, and second, the enrichment of the literature on this subject, since it shows that in a country of continental Europe after the mandatory adoption of IFRS earning management continues to exist. |
| first_indexed | 2024-12-18T11:46:08Z |
| format | Article |
| id | doaj.art-bc521ea654cc47ec99d966318423be12 |
| institution | Directory Open Access Journal |
| issn | 1138-4891 1988-4672 |
| language | English |
| last_indexed | 2024-12-18T11:46:08Z |
| publishDate | 2017-06-01 |
| publisher | Universidad de Murcia |
| record_format | Article |
| series | Revista de Contabilidad: Spanish Accounting Review |
| spelling | doaj.art-bc521ea654cc47ec99d966318423be122022-12-21T21:09:17ZengUniversidad de MurciaRevista de Contabilidad: Spanish Accounting Review1138-48911988-46722017-06-01202Earnings management and European Regulation 1606/2002: Evidence from non-financial Portuguese companies listed in EuronextAgostinho Pereira0Maria do Céu Gaspar Alves1Polytechnic Institute of Santarém, Santarém, PortugalResearch Unit of Business Sciences (NECE-UBI) and Assistant Professor in Accounting at University of Beira Interior (UBI), Estrada do Sineiro, Covilhã, PortugalBackground Since 2005, Portuguese listed companies have experienced an important institutional change, the mandatory adoption of new accounting standards (IFRS/IAS). European Union Regulation 1606/2002 made compliance with IFRS mandatory for the consolidated accounts of companies with securities traded on a regulated market. Existing literature suggests that accounting standards and country-specific characteristics affect the level of earnings management. Objectives Therefore, the purpose of this paper is to analyze how accounting standards and the mandatory adoption of IFRS/IAS affect earning management in Portuguese listed companies. Methods In order to do this, the paper analyze the evidence of earnings management, measured through discretionary accruals, after the adoption of IAS/IFRS by non-financial listed companies on Euronext Lisbon in the period 2005–2015. The Dechow et al. (2003)econometric model will be used, and empirical results indicate that non-financial listed companies in Portuguese stock exchange in the period 2005–2015 show evidence of discretionary accruals as a proxy for earnings management. Results Thus, the results suggest that after the adoption of IAS/IFRS there are still indications of earnings management in non-financial listed companies. Conclusions This research will achieve two distinct contributions. First, filling a gap at the national level, given that there was no such study, that considered the analyzed period, and second, the enrichment of the literature on this subject, since it shows that in a country of continental Europe after the mandatory adoption of IFRS earning management continues to exist.https://revistas.um.es/rcsar/article/view/357071Earnings managementDiscretionary accrualsListed companiesAccounting standardsRegulationEnforcement |
| spellingShingle | Agostinho Pereira Maria do Céu Gaspar Alves Earnings management and European Regulation 1606/2002: Evidence from non-financial Portuguese companies listed in Euronext Revista de Contabilidad: Spanish Accounting Review Earnings management Discretionary accruals Listed companies Accounting standards Regulation Enforcement |
| title | Earnings management and European Regulation 1606/2002: Evidence from non-financial Portuguese companies listed in Euronext |
| title_full | Earnings management and European Regulation 1606/2002: Evidence from non-financial Portuguese companies listed in Euronext |
| title_fullStr | Earnings management and European Regulation 1606/2002: Evidence from non-financial Portuguese companies listed in Euronext |
| title_full_unstemmed | Earnings management and European Regulation 1606/2002: Evidence from non-financial Portuguese companies listed in Euronext |
| title_short | Earnings management and European Regulation 1606/2002: Evidence from non-financial Portuguese companies listed in Euronext |
| title_sort | earnings management and european regulation 1606 2002 evidence from non financial portuguese companies listed in euronext |
| topic | Earnings management Discretionary accruals Listed companies Accounting standards Regulation Enforcement |
| url | https://revistas.um.es/rcsar/article/view/357071 |
| work_keys_str_mv | AT agostinhopereira earningsmanagementandeuropeanregulation16062002evidencefromnonfinancialportuguesecompanieslistedineuronext AT mariadoceugasparalves earningsmanagementandeuropeanregulation16062002evidencefromnonfinancialportuguesecompanieslistedineuronext |