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Earnings quality among high-share liquidity companies: evidence from Central and Eastern European firms

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  • Comporek Michal

    (Faculty of Economics and Sociology, University of Lodz, Lodz, Poland)

Abstract

Paper’s objectives The main aim of the paper is to analyze the earnings quality of high-share liquidity companies from Poland, Romania, and Hungary whose activities are outside the finance sector. Methods applied Earnings quality, i.e., earnings persistence, predictability, and accruals quality, was assessed using the Kruskal–Wallis test, the U Mann–Whitney test, the Wilcoxon Signed Ranks test, and Spearman’s rank correlation coefficients. Findings The research demonstrates that companies listed in the Bucharest Stock Exchange tend to provide higher earnings quality than other firms in the CEEplus index. In the tested sample, there was a noticeable domination of managerial practices aimed at managing the earnings downward. This also happened in 2020, the period negatively affected by the SARS-CoV-2 pandemic. Originality/value This study fills a gap in the literature regarding the quality of accounting data reported among listed companies from Central and Eastern Europe (CEE) countries that are characterized by high liquidity of shares.

Suggested Citation

  • Comporek Michal, 2023. "Earnings quality among high-share liquidity companies: evidence from Central and Eastern European firms," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 59(4), pages 315-332, December.
    • Handle: RePEc:vrs:ijomae:v:59:y:2023:i:4:p:315-332:n:1
    DOI: 10.2478/ijme-2023-0017
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    More about this item

    Keywords

    CEEplus index; earnings management; earnings quality; joint stock companies; share liquidity;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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