Truthfulness in Accounting: How to Discriminate Accounting Manipulators from Non-manipulators

Vladu, Alina Beattrice; Salas, Oriol Amat; Cuzdriorean, Dan Dacian

doi:10.1007/s10551-016-3048-3

Cited by 61 publications

(37 citation statements)

References 100 publications

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“…Vladu et al (2016) develop a model for detecting earnings manipulators using financial statement ratios from a sample of Spanish listed companies. They suggest that their proposal can be extremely useful in detecting manipulators and can be employed by a wide range of users of accounting information including stock exchange supervisors or investment professionals.…”

Section: Misbehaviors In Accounting and Financementioning

confidence: 99%

Ethics in Finance and Accounting: Editorial Introduction

2016

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In light of the recent crisis and its aftershocks, it becomes crucial to reflect on the relationship between finance and accounting and on how to integrate ethics and efficiency, as well as on how to motivate and empower practitioners in the world of finance to commit to justice, fairness and enhanced understanding, and to improving their personal integrity. This article, written as an editorial introduction to a special issue includes works related to control measurement and ethical behavior, misbehaviors in finances and accounting, professionalism in accounting, ethical investing and corporate reporting. We conclude by suggesting further research for a better integration of technical aspects of accounting and finances into business activity-human activity actually-and an for understanding of ethics not limited to rules, but as a mutual and interdependent system of values (human goods), virtues and principles.

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Section: Misbehaviors In Accounting and Financementioning

confidence: 99%

Ethics in Finance and Accounting: Editorial Introduction

2016

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“…Some researchers note that certain earnings management behaviour is acceptable under conventional accounting standards (Bruns & Merchant, 1990;Merchant & Rockness, 1994;Parfet, 2000;Arya, Glover, & Sunder, 2003). Other scholars regard earnings management behaviour as going against the value of religion (Ronen & Yaari, 2008;Loomis, 1999;Grant, DePree Jr, & Grant, 2000;Solomon, 1992;Rawls, 1972;Vladu, Amat, & Cuzdriorean, 2017;Farrell, 2015;Abdullah et al, 2014). For instance, earnings management behaviour goes against the truthfulness of accounting (Ronen & Yaari, 2008); it is intolerable (Loomis, 1999;Grant et al, 2000); it is immoral (Solomon, 1992) and it goes against the principle of justice (Rawls, 1972).…”

Section: Introductionmentioning

confidence: 99%

“…For instance, earnings management behaviour goes against the truthfulness of accounting (Ronen & Yaari, 2008); it is intolerable (Loomis, 1999;Grant et al, 2000); it is immoral (Solomon, 1992) and it goes against the principle of justice (Rawls, 1972). The financial losses witnessed in Enron, WorldCom, Tyco International (Vladu et al, 2017), Olympus, Tesco (Farrell, 2015) and Satyam Computer Services (U.S. Securities and Exchange Commission (SEC), 2011) within the international front and Transmile and Megan Media in Malaysia (Abdullah et al, 2014) have all been linked, whether directly or indirectly, to issues of deception, misleading information and untruthful accounting.…”

Section: Introductionmentioning

confidence: 99%

Do Shariah-compliant Companies Engage Lesser Earnings Management Behaviour?

Mohd-Sabrun¹,

Muhamad²,

Yusoff³

et al. 2018

AJBA

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Manuscript type: Research paper. Research aims: This study aims to understand how reputation, financial distress and financial performance influence Shariah-compliant companies into engaging earnings management behaviour. The financial data of 69 FTSE Bursa Malaysia 100 Index companies, dating 2010 to 2014 (five years), were analysed. Design/ Methodology/ Approach: This study uses the Modified Jones model (Jones, 1991; Dechow, Sloan, & Sweeney, 1996), Roychowdhury's model (2006) to examine earnings management behaviour of Shariah-compliant companies. Research findings: The results of this study suggest that company's reputation, financial distress and financial performance are factors that can influence company's earnings management behaviour and that Shariah values are ineffective in deterring the management from earnings management behaviour. Theoretical contribution/ Originality: The findings of this study contribute to the literature by showing that Shariah values may not

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“…Finally, among the latest studies aimed at investigating the use of discretion by managers and the possible phenomena of earnings management, there is the study by Dechow et al (2012). Based on these experiences, Vladu et al (2017) have identified a series of financial statement ratios that can enable the identification of any EM phenomena by managers (or, in general, by those who are able to use their dominant position in order to adapt the budget results to their own personal purposes). This model, although paving the way for new research questions, seems more aimed at a statistical identification of the elements particularly subject to EM practices in the financial statement.…”

Section: Identification Of Evaluative Discretion and Earnings Managemmentioning

confidence: 99%

The “Quantitative Discretion Index”: A New Business Ethics Tool to Prevent Opportunistic Earnings Management Practices

Montani¹,

Perrini²,

Gervasio³

et al. 2020

JMS

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In this article, we build a Quantitative Discretion Index (hereafter referred to as QDI) to identify within the financial statements the most vulnerable areas related to possible opportunistic earnings management (hereafter referred to as EM) practices, with the aim of supporting ethical behaviour in corporate social communications. In order to better explain the QDI construction method, a practical example is implemented, starting from an analysis of the consolidated balance sheet of an Italian listed company operating in the media sector (in 2016). The QDI might be added to the contents of voluntary information provided by companies that pay attention to ethical behaviour and corporate social responsibility. Within each corporate balance sheet, the QDI allows stakeholders to identify the evaluation discretion areas, where any possible EM practices may be more likely and on which it may be more useful for stakeholders to focus their research attention. Business ethics aims to mitigate EM practices in social communications, including voluntary communication. Indeed, the discretional nature of the assessment of financial statements items by the administrative body represents one of the main weaknesses in the activity of mitigating earnings management practices. At present, the literature has dealt with the relations between ethical behaviour and EM; however, the research should also provide tools that can identify and neutralise the possibilities that opportunistic EM practices can be implemented, thus resulting in more ethical business practices.

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Truthfulness in Accounting: How to Discriminate Accounting Manipulators from Non-manipulators

Cited by 61 publications

References 100 publications

Ethics in Finance and Accounting: Editorial Introduction

Ethics in Finance and Accounting: Editorial Introduction

Do Shariah-compliant Companies Engage Lesser Earnings Management Behaviour?

The “Quantitative Discretion Index”: A New Business Ethics Tool to Prevent Opportunistic Earnings Management Practices

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