Resumo:
Our study investigates the earnings management in the European Union publicly listed firms that adopted IFRS. We also examine whether the incentives of earnings management are likely to be different in Germany and France firms, highlighting the differences from the United Kingdom firms. We use the discretionary accruals model to measure the level of earnings management; this corresponds to the value of the difference between the levels of total and non-discretionary accruals, a model frequently used to measure earnings management practices. Our empirical study is based on listed firms in the United Kingdom, Germany and France, in the period from 2006 to 2009 and using the Thomson Worldscope Database. Our results demonstrate that firms located in United Kingdom have the lower, and firms located in German the higher, level of earnings management, with firms located in France placed in the middle. They confirm findings from literature which indicate that even after IFRS adoption, the difference in the institutional environment and therefore the difference in the earnings management practice in the listed firms would vary across countries. These findings contribute to the literature by providing useful indications to regulators and standard setters interested in evaluating the effectiveness of institutional environment in one setting where high level accounting standards are already in use. |
