DO CORPORATE GOVERNANCE SPECIAL LISTING SEGMENTS AND AUDITING CURB REAL AND ACCRUAL-BASED EARNINGS MANAGEMENT? EVIDENCE FROM BRAZIL

Autores

  • Antonio Lopo Martinez FUCAPE BUSINESS SCHOOL

DOI:

https://doi.org/10.4270/ruc.20117

Palavras-chave:

Earnings management by accounting choices. Earnings management by operational decisions. Discretionary accruals. Real earnings management.

Resumo

This article examines whether enhanced corporate governance practices, auditing by one of the Big Four and qualified auditors’ opinions, are associated with the propensity to engage in earnings management through accounting choices or operational decisions in Brazil. Although there are some studies on earnings management by Brazilian companies, very few have examined the presence of operational decisions in this practice and none has addressed how to minimize this. In order to infer earnings manipulation by accounting choices and operational decisions, we investigate if firms that manage earnings through discretionary accruals also make operational decisions for the same purpose. The evidence from a sample of Brazilian firms suggests that listing on the São Paulo Stock Exchange´s Corporate Governance Special Listing Segments, which requires enhanced corporate governance practices, among other requirements, and auditing by one of the Big Four firms reduce in general earnings management by accounting choices, and that qualified opinion from auditor  is an indicator of earnings management. However, except in special cases, listing in the Corporate Governance Special Listing Segments and auditing by the Big Four do not assure less earnings management by operational decisions.

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Biografia do Autor

Antonio Lopo Martinez, FUCAPE BUSINESS SCHOOL

Professor Associado Fucape Business School

Publicado

2011-10-30

Como Citar

Martinez, A. L. (2011). DO CORPORATE GOVERNANCE SPECIAL LISTING SEGMENTS AND AUDITING CURB REAL AND ACCRUAL-BASED EARNINGS MANAGEMENT? EVIDENCE FROM BRAZIL. Revista Universo Contábil, 7(4), 98–117. https://doi.org/10.4270/ruc.20117

Edição

Seção

Seção Internacional