The influence of the financial crisis of 2008 on earnings management behavior

• Autor(a) principal: Elverfeldt, Hubertus Dominik Maria Johannes von Ulm zu Erbach Freiherr von
• Data de Publicação: 2021
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/35267
• topic: Domínio/Área Científica::Ciências Sociais::Economia e Gestão

This study examines the influence of the Financial Crisis of 2008 on European firms’ earnings management behavior. For this purpose, the period from 2005 to 2012 and a sample of 16 different European countries were considered and divided into three periods to examine whether managers manipulated their earnings upwards or downwards through accrual-based or real earnings management. In total, three different models were used for each of the two types of earnings management. The results indicate that European companies engaged in upward accrual-based earnings management before and during the crisis, but after the crisis, their accruals reversed. I find upward behavior in the pre-crisis period for REM. While during the crisis managers used REM for both upward and downward earnings management, in the post-crisis period a downward behavior was found. Furthermore, earnings management drivers and how their influence changed due to the crisis were analyzed. I identify contradicting as well as confirming findings to previous literature. Overall, I find that the crisis has had an impact on the influence of the drivers on earnings management.