Accounting comparability and accruals-based earnings management: Evidence on listed firms in an emerging market

Users of financial statements are in a better position to evaluate the performance of the firm in question if its accounting system and methods are comparable with those of other firms. Even though accounting comparability is markedly beneficial, the empirical studies on its impact on earnings manag...

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Autor principal:	Nguyen Thanh Liem
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2021
Materias:	accounting comparability earnings management financial constraints non-linear relationship financial reporting quality Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/f812eae2a0cc4fc28598c36d28f879d7
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spelling	oai:doaj.org-article:f812eae2a0cc4fc28598c36d28f879d72021-12-02T14:35:29ZAccounting comparability and accruals-based earnings management: Evidence on listed firms in an emerging market2331-197510.1080/23311975.2021.1923356https://doaj.org/article/f812eae2a0cc4fc28598c36d28f879d72021-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2021.1923356https://doaj.org/toc/2331-1975Users of financial statements are in a better position to evaluate the performance of the firm in question if its accounting system and methods are comparable with those of other firms. Even though accounting comparability is markedly beneficial, the empirical studies on its impact on earnings management are scant, especially in the context of developing countries that have not applied International Financial Reporting Standards (IFRS). In the present study, we examined the association between comparability and accruals-based earnings management, considering the moderating impacts of financial constraints in the context a developing economy. The article used a sample of 502 Vietnamese non-financial listed firms from 2010 to 2019. Three proxies of comparability and two measures of accruals-based earnings manipulation, together with several empirical strategies, are employed. First, the research provides evidence suggesting that comparability reduces firms’ tendency to engage in earnings management. Furthermore, there is evidence suggesting that firms could give more weighting to the comparability with a small number of firms rather than various firms in the same industry. Second, we are the first to identify that financial constraints have a moderating effect: more constrained firms do not reduce earnings manipulation as their accounting comparability improves. Based on research findings, we provided implications to stakeholders and propose directions for future studies.Nguyen Thanh LiemTaylor & Francis Grouparticleaccounting comparabilityearnings managementfinancial constraintsnon-linear relationshipfinancial reporting qualityBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 8, Iss 1 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	accounting comparability earnings management financial constraints non-linear relationship financial reporting quality Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	accounting comparability earnings management financial constraints non-linear relationship financial reporting quality Business HF5001-6182 Management. Industrial management HD28-70 Nguyen Thanh Liem Accounting comparability and accruals-based earnings management: Evidence on listed firms in an emerging market
description	Users of financial statements are in a better position to evaluate the performance of the firm in question if its accounting system and methods are comparable with those of other firms. Even though accounting comparability is markedly beneficial, the empirical studies on its impact on earnings management are scant, especially in the context of developing countries that have not applied International Financial Reporting Standards (IFRS). In the present study, we examined the association between comparability and accruals-based earnings management, considering the moderating impacts of financial constraints in the context a developing economy. The article used a sample of 502 Vietnamese non-financial listed firms from 2010 to 2019. Three proxies of comparability and two measures of accruals-based earnings manipulation, together with several empirical strategies, are employed. First, the research provides evidence suggesting that comparability reduces firms’ tendency to engage in earnings management. Furthermore, there is evidence suggesting that firms could give more weighting to the comparability with a small number of firms rather than various firms in the same industry. Second, we are the first to identify that financial constraints have a moderating effect: more constrained firms do not reduce earnings manipulation as their accounting comparability improves. Based on research findings, we provided implications to stakeholders and propose directions for future studies.
format	article
author	Nguyen Thanh Liem
author_facet	Nguyen Thanh Liem
author_sort	Nguyen Thanh Liem
title	Accounting comparability and accruals-based earnings management: Evidence on listed firms in an emerging market
title_short	Accounting comparability and accruals-based earnings management: Evidence on listed firms in an emerging market
title_full	Accounting comparability and accruals-based earnings management: Evidence on listed firms in an emerging market
title_fullStr	Accounting comparability and accruals-based earnings management: Evidence on listed firms in an emerging market
title_full_unstemmed	Accounting comparability and accruals-based earnings management: Evidence on listed firms in an emerging market
title_sort	accounting comparability and accruals-based earnings management: evidence on listed firms in an emerging market
publisher	Taylor & Francis Group
publishDate	2021
url	https://doaj.org/article/f812eae2a0cc4fc28598c36d28f879d7
work_keys_str_mv	AT nguyenthanhliem accountingcomparabilityandaccrualsbasedearningsmanagementevidenceonlistedfirmsinanemergingmarket
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Accounting comparability and accruals-based earnings management: Evidence on listed firms in an emerging market

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