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Earnings management in Brazilian credit unions

Author

Listed:
  • Saulo Cardoso Maia

    (Centre for Higher Education Lafaiete)

  • Valéria Gama Fully Bressan

    (Federal University of Minas Gerais)

  • Wagner Moura Lamounier

    (Federal University of Minas Gerais)

  • Marcelo José Braga

    (Federal University of Viçosa)

Abstract

This article investigates the practice of earnings management by Brazilian credit unions. The main focus is to check for the existence of earnings management to meet the capital adequacy requirements imposedby the Brazilian Central Bank, in line with the Basel Accords. The study also examines the occurrence of income smoothing across credit unions as well as earnings management to avoid reporting losses. The results indicate that the studied institutions do not manage their earnings towards regulatory capital adequacy, but they do engage in income smoothing and earnings management to avoid reporting losses.

Suggested Citation

  • Saulo Cardoso Maia & Valéria Gama Fully Bressan & Wagner Moura Lamounier & Marcelo José Braga, 2013. "Earnings management in Brazilian credit unions," Brazilian Business Review, Fucape Business School, vol. 10(4), pages 91-109, October.
    • Handle: RePEc:bbz:fcpbbr:v:10:y:2013:i:4:p:91-109
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    References listed on IDEAS

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