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Earnings Management in Europe Post IFRS: Do Cultural Influences Persist?

Author

Listed:
  • Sidney J. Gray

    (University of Sydney)

  • Tony Kang

    (McMaster University)

  • Zhiwei Lin

    (Shenzhen University)

  • Qingliang Tang

    (University of Western Sydney)

Abstract

We investigate the extent to which the mandatory adoption of International Financial Reporting Standards (IFRS) has restricted the previously documented association between national culture and international differences in earnings management practices. We analyze the earnings management behavior of publicly listed firms in 14 member countries of the European Union during the period 2000–2010. Our findings show that the tendency to engage in earnings management continues post IFRS and that cultural factors remain influential in explaining differences in the magnitude of earnings management behavior across countries.

Suggested Citation

  • Sidney J. Gray & Tony Kang & Zhiwei Lin & Qingliang Tang, 2015. "Earnings Management in Europe Post IFRS: Do Cultural Influences Persist?," Management International Review, Springer, vol. 55(6), pages 827-856, December.
    • Handle: RePEc:spr:manint:v:55:y:2015:i:6:d:10.1007_s11575-015-0254-7
    DOI: 10.1007/s11575-015-0254-7
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    7. Lewellyn, Krista B. & Bao, Shuji 'Rosey', 2017. "The role of national culture and corruption on managing earnings around the world," Journal of World Business, Elsevier, vol. 52(6), pages 798-808.
    8. Omar Mohammad Al-Hawatmeh, 2020. "Earning Management and International Financial Reporting Standard (IFRS) Implementation Process: Empirical Study," Journal of Social Sciences (COES&RJ-JSS), , vol. 9(2), pages 603-616, April.
    9. R.M. Ammar ZAHID & Alina ȚARAN & F.N. Can SIMGA-MUGAN, 2018. "Cultural values and financial reporting practices: contemporary tendencies in Eastern European countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 9, pages 89-109, December.
    10. Ugrin, Joseph C. & Mason, Terry W. & Emley, Anna, 2017. "Culture's consequence: The relationship between income-increasing earnings management and IAS/IFRS adoption across cultures," Advances in accounting, Elsevier, vol. 37(C), pages 140-151.
    11. Dauth, Tobias & Pronobis, Paul & Schmid, Stefan, 2017. "Exploring the link between internationalization of top management and accounting quality: The CFO’s international experience matters," International Business Review, Elsevier, vol. 26(1), pages 71-88.
    12. Singgih Wijayana & Sidney J. Gray, 2019. "Institutional Factors and Earnings Management in the Asia-Pacific: Is IFRS Adoption Making a Difference?," Management International Review, Springer, vol. 59(2), pages 307-334, April.
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    14. Wijayana, Singgih & Gray, Sidney J., 2018. "Capital market consequences of cultural influences on earnings: The case of cross-listed firms in the U.S. stock market," International Review of Financial Analysis, Elsevier, vol. 57(C), pages 134-147.
    15. Franck Missonier‐Piera & Cédric Spadetti, 2023. "The consequences of earnings management for the acquisition premium in friendly takeovers," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 50(1-2), pages 308-334, January.

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