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Futures, provisional sales, and earnings management in the global gold mining industry

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  • Rigamonti, Alessandro Paolo
  • Greco, Giulio
  • Capocchi, Alessandro

Abstract

This study investigates the impact of futures on earnings management in the gold mining industry. Using quarterly data from a global sample of gold firms between 2003 and 2019, we find evidence of income-increasing accruals and real earnings management during contango periods (when futures price exceed the current spot price). Conversely, gold firms use income-decreasing accruals and real earnings management during backwardation periods (when the current spot price exceeds the futures price). This study contributes to the literature with evidence on futures as determinants of earnings management, as well as on the process through which managers smooth earnings.

Suggested Citation

  • Rigamonti, Alessandro Paolo & Greco, Giulio & Capocchi, Alessandro, 2024. "Futures, provisional sales, and earnings management in the global gold mining industry," Finance Research Letters, Elsevier, vol. 59(C).
    • Handle: RePEc:eee:finlet:v:59:y:2024:i:c:s1544612323011807
    DOI: 10.1016/j.frl.2023.104808
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    More about this item

    Keywords

    Earnings management; Future; Gold; Interim reporting;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market

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