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The Evolution of the Accounting Practices During the Recent Economic Crisis: Empirical Survey Regarding the Earnings Management

Author

Listed:
  • Cătălina Gorgan

    (Academy of Economic Studies, Bucharest, Romania)

  • Vasile Gorgan

    (Academy of Economic Studies, Bucharest, Romania)

  • Valentin Florentin Dumitru

    (Academy of Economic Studies, Bucharest, Romania)

  • Ileana Cosmina Pitulice

    (Academy of Economic Studies, Bucharest, Romania)

Abstract

Financial markets rely on confidence and confidence is supported by the presumption that financial statements are accurate and reflect the economic reality. Financial scandals from 2001-2002 as well as the recent economic crisis have raised questions about the integrity of accounting information provided to investors and other categories of users. In this context, our study aims to analyze the extent to which financial reporting is involved in financial crisis and, on the other hand to outline the changes produced by the crisis in the quality of financial information reported by companies. The main objective of the paper consist in arguing that earnings management by discretionary accruals for big European companies decline during the recent economic crisis compared to previous period.

Suggested Citation

  • Cătălina Gorgan & Vasile Gorgan & Valentin Florentin Dumitru & Ileana Cosmina Pitulice, 2012. "The Evolution of the Accounting Practices During the Recent Economic Crisis: Empirical Survey Regarding the Earnings Management," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(32), pages 550-562, June.
    • Handle: RePEc:aes:amfeco:v:14:y:2012:i:32:p:550-562
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    References listed on IDEAS

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    6. Michel Magnan & Daniel Thornton, 2009. "Fair Value Accounting," CIRANO Working Papers 2009s-47, CIRANO.
    7. DeFond, Mark L. & Subramanyam, K. R., 1998. "Auditor changes and discretionary accruals," Journal of Accounting and Economics, Elsevier, vol. 25(1), pages 35-67, February.
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    Cited by:

    1. Rami Salem & Ernest Ezeani & Xi Song, 2023. "The relationship between religiosity and voluntary disclosure quality: a cross-country evidence from the banking sector," Review of Quantitative Finance and Accounting, Springer, vol. 60(3), pages 983-1023, April.
    2. Abdelsalam, Omneya & Chantziaras, Antonios & Ibrahim, Masud & Omoteso, Kamil, 2021. "The impact of religiosity on earnings quality: International evidence from the banking sector," The British Accounting Review, Elsevier, vol. 53(6).
    3. Luminiţa Ionescu & George Lăzăroiu & Gheorghe Iosif, 2012. "Corruption and bureaucracy in public services," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(Special N), pages 665-679, November.

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    More about this item

    Keywords

    discretionary accruals; earnings management; accounting information quality; international financial reporting standards (IFRS); economic crisis;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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