Earnings management and issue characteristics: an empirical analysis of IPOs in India

PurposeThis study aims to examine earnings management around initial public offerings (IPOs) in India. It also explores the influence of issue characteristics on earnings management around the IPOs.Design/methodology/approachA sample of 511 IPOs that came during April 2003-March 2019 is studied for calculating earnings management for pre-issue, issue and post-issue years. Using Cross-Sectional Modified Jones Model, the paper presents earnings management on the basis of three proxies i.e. discretionary accruals, discretionary current accruals and discretionary long-term accruals. The influence of issue characteristics on earnings management practised around the IPOs is also observed through correlation and multiple regression analysis.FindingsThe paper finds that earnings management is abnormally high during the issue year compared with pre-issue and post-issue years. It also unveils that profitability, premium, age, and size of the issuer significantly determine the level of pre-issue and issue year earnings management practised by Indian IPO issuers.Research limitations/implicationsThe findings are useful to stakeholders (potential investors, analysts and regulators) to observe, assess and understand the quality of financial numbers that are based on fallacious disclosure of accounting figures. It provides insight into the possibilities of managed earnings around the issue that could influence investors' decision-making. Further, the study reflects the efficacy of Indian regulatory norms for IPOs.Originality/valueTo the authors' knowledge, it is the only Indian study that had used an extensive data set of about two decades to calculate earnings management during pre-issue, issue and post-issue years. The uniqueness of the study further lies in three proxies of earnings management representing short-term and long-term accruals. Moreover, it is the first study to observe the influence of IPO issue characteristics on earnings management.

COVID-19 and earnings management: a comparison between Chinese family and non-family enterprises

PurposeThe main objective of this study is to examine the impact of the COVID-19 pandemic on earnings management practices in China using a sample of family and non-family enterprises. More specifically, this study aims to examine whether the COVID-19 pandemic causes variation in Chinese listed family and non-family enterprises' operations, as reflected in the level of real earnings management (REM).Design/methodology/approachThis study uses three standardised REM indicators, namely, the abnormal level of cash flows from operations, the abnormal level of production costs and the abnormal level of discretionary expenses. Ordinary least squares (OLS) regressions are applied to compare the earnings management of Chinese family and non-family enterprises during the pre-pandemic period (2017–2019) and the pandemic period (2020).Findings The authors find that Chinese listed non-family enterprises tend to participate in more REM activities than family enterprises before the COVID-19 outbreak. However, the opposite is true during the pandemic. The authors also find that COVID-19 has increased the involvement of family and non-family enterprises in REM activities.Originality/valueThe results of previous studies based on REM using Chinese listed firms may not be applicable under the new social background of COVID-19. As the period after the COVID-19 outbreak is relatively recent, Chinese researchers have yet to study it comprehensively. The present study is amongst the first empirical attempts investigating the effect of a pandemic financial reporting by investigating whether and how the burst of the COVID-19 crisis affected financial reporting through the earnings management practices of listed Chinese family and non-family enterprises. Such information is crucial because it can provide analysis for all stakeholders to make better decisions.

Earnings Management amid the COVID-19 Financial Crisis: The Experience of Poland

This study examines the consequences of the COVID-19 turbulence on the infor-mativeness of financial reporting. Using data from non-financial public compa-nies in Poland, our evidence documents the evolution of accrual and real earn-ings management during the pandemic period. We estimate earnings quality with cross-sectional models, observing abnormal accruals, abnormal cash flow from operations, abnormal discretionary expenditures and abnormal production costs. We contribute to the debate on earnings management during financial crises. Specifically, discretionary accruals declined significantly during the crisis. This suggests companies were less eager to inflate earnings via accruals. Polish firms also seemed to be more inclined to adopt the 'big bath' strategy to inflate future income. Additionally, the research provides support for predictions that real earn-ings management gained importance during the turbulence when the total effect of boosting income through real transactions was significant. It suggests that dur -ing the COVID-19 crisis companies based their strategies more on the probability of being detected, rather than on the cost of such activities. The study adds to the debate on the qualitative characteristics of earnings as key accounting informa-tion and its importance in corporate finance, issues that cannot be overestimated from the perspective of company stakeholders.

COVID-19 outbreak and earnings management practice: case of Tunisia

Purpose: This article attempts to investigate the impact of COVID-19 outbreak on the earnings management (EM) for listed Tunisian companies. Design/methodology/approach: The study focuses on both accrual-based and real EM (REM) practices. With panel data, the authors employ the multiple regression approach and the generalized least squares (GLS) estimate method. The sample is made up of 41 listed companies observed from the first half of 2016 to the second half of 2020. Findings: This study finds that, during the pandemic period, Tunisian firms use decreasing income discretionary accruals. Also, with regard to REM, the COVID-19 variable displays a negative response coefficient but of lesser magnitude. Research limitations/implications: This study's findings can help Tunisian authorities, listed companies and market investors to better understand EM practices during a negative shock and to better understand the various internal and external factors influencing the quality of financial reporting. These findings may contribute, also, significant EM implications for scholars interested in other emerging markets. As limitations, the authors point out mainly to the small sample size used in this study and that the authors used a single model, namely the modified Jones model (1995), to measure the accounting EM. Also, the authors used a binary variable as a proxy for the COVID- 19 pandemic. Originality/value: To the best of authors' knowledge, it is the first in Tunisia, if not in Africa, to examine the impact of the COVID-19 pandemic on EM practices. Second, this study builds on previous work by examining both the accrual-based EM and the REM. © 2023, Riadh Garfatta, Mouna Hamza and Imen Zorgati.

The moderating role of COVID-19 pandemic on the relationship between CEO characteristics and earnings management: evidence from Bangladesh

This research uses accrual and real earnings management strategies in an emerging economy to evaluate how CEO characteristics (i.e. CEO nationality, duality, and compensation) affect earnings management and how the COVID-19 pandemic modifies this connection. The empirical investigation used annual reports from 2011 to 2021 of 118 listed enterprises in thirteen sectors of non-financial organizations in Bangladesh. The study divided the sample further into COVID-19 pandemic and pre-pandemic periods. Findings show that firms tend to engage less in real earnings management during the COVID-19 pandemic period compared to pre-pandemic period. CEO nationality significantly negatively affects accrual-earnings management, but CEO dualism positively affects real-earnings management. CEO compensation significantly impacts accrual and real earnings management. Finally, COVID-19 moderates the association between CEO compensation and real-earnings management positively. The study's findings contribute to the corporate governance literature by providing insights into the influence of CEO characteristics on earnings management. This is the first study to consider the moderating role of the COVID-19 pandemic on the relationship between CEO traits and earnings management. © 2023 The Author(s). This open access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license.

The discipline vs complement role of product market competition and market power: Evidence from real earnings management in an emerging market

We empirically study the role of product market competition and market power, discipline vs complement role, on real earnings management (REM) in Indonesia. Using 1800 firm-year observations from 2012 to 2020, we discover that the competition has an inverse association with REM, implying that product market competition plays a role in disciplining managers from engaging REM. Despite the negative association observed, we do not have evidence of any significant relationship between market power and REM. These findings hold for a set of robustness tests. We also evidenced that the discipline role of competition in REM will be more pronounced after the Economic ASEAN Community (EAC) period and pre-COVID-19 as well as in small firms and income-increasing firms. Although we cannot include corporate governance variable in our model due to data constrain, to the best of our knowledge, the current study will be the first study examining the role of market competition and market power on REM by considering the external shock, EAC period and COVID19, in emerging market such as Indonesia. This study implies that government and capital market regulators need to design and issue new laws or regulations that can encourage the internal governance structure to maximize the potential role of market power to mitigate REM. © 2023 The Author(s). This open access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license.

Earnings management during the COVID-19 crisis: evidence from the Brazilian and American capital markets

PurposeThe main purpose of this study is to evaluate whether the COVID-19 pandemic has stimulated earnings management among publicly traded companies in Brazil and the USA.Design/methodology/approachThe authors analyzed the above-mentioned effects based on 22,244 observations of Brazilian companies and 139,856 observations of American companies from 1998 to 2020. The proxy used to detect earnings management based on discretionary accruals (DAC) was obtained by using the Modified Jones Model (MJM) (Dechow et al., 1995), with adjustments suggested by Kothari et al. (2005). In accordance with previous studies (e.g. Brown et al., 2015;Enomoto et al., 2015;Galdi et al., 2020;Huang and Sun, 2017;Roychowdhury, 2006), the authors also employed a second proxy to detect earnings management through real activities associated with unusual losses for fixed assets (property, plant and equipment (PPE)).FindingsThe study's findings indicate that the discretionary accruals of Brazilian companies varied in a more accentuated manner during the COVID-19 pandemic, making it possible to deduce that a recent history of economic depression may entail greater incentives for earnings management in an emerging economy. In addition, the authors verified that the effects of the current crisis on earnings management proxies denote a signal that is distinct from previous economic crises, which may be interpreted as an attempt to postpone the effects of the pandemic on financial statements, especially those of the Brazilian capital markets.Originality/valueUnlike previous crises, this pandemic has led to direct restrictions on a wide variety of economic segments rather than indirect contagion due to anomalies in the financial markets, making it a phenomenon with the characteristics of a quasi-natural experiment for studies related to the quality of accounting information. Considering that both Brazil and the USA provide an opportune economic contrast, given their discrepancies in terms of economic growth over the past two decades, the researchers believe that there is an unusual opportunity to understand how earnings management can be an incentive for managers in environments where crises arose from natural causes.

Covid-19 pandemic, a catalyst for aggressive earnings management by banks?

This paper investigates the effects of the Covid-19 pandemic on the financial reporting quality of European banks by examining the occurrence of earnings management specifically income smoothing. Using a sample of listed European banks, we employ panel estimation to compare income smoothing in the pre-pandemic period (2019Q1-2019Q4) and the pandemic period (2020Q1-2021Q4). We find that earnings management has significantly increased during the pandemic years, evidencing how the quality of financial reporting is affected during the crisis period. Our findings further suggest that amid the crisis, governance quality limits the incidence of earnings management and emphasizes how the strength of country-level governance and institutional framework affects the quality of financial reporting. Further analysis shows that though banks are inclined to manage earnings during a crisis, nevertheless, the presence of high-quality audit is a limiting factor on the incidence of earnings management in the face of crisis. Our findings which are relevant to investors, market participants, and regulators among others make a significant contribution to the accounting literature and specifically complement the strand of literature on the discretionary use of loan loss provision for earnings management during crisis. © 2022 Elsevier Inc.

Impacts of crisis on SME bankruptcy prediction models' performance

• Decrease SME bankruptcy prediction models' performance for crisis periods. • No significant impacts of quantitative indicators for SME bankruptcy prediction. • High performance with gradient boosting algorithm on imbalanced data. • High performance with gradient boosting algorithm for three years predictions. Turbulent economic situation, changes in financial reporting, swift legislative changes, or companies' earnings management during the COVID-19 crisis might have impacted the performance of SME bankruptcy prediction models. Due to these circumstances, the performance of existing bankruptcy prediction models might have worsened. The main aim of this study is to analyse the impact of the crisis on the performance of bankruptcy prediction models. Data from 2015 to 2019 was collected for more than 90 000 SMEs to develop prediction models for three periods – two non-crisis periods and one crisis period. One-year, two-year and three-year predictions were made for these three periods via CatBoost, LightGBM and XGBoost methods. The results of this manuscript indicate that the performance of prediction models was significantly weaker during crisis periods than the performance during non-crisis periods. The weaker performance was the most evident for one-year predictions (6.5%). The difference was slightly lower for two-year predictions (4.8%) and three-year predictions (4.1%). Since lower sensitivity levels caused worse performance during crisis periods, it can be assumed that these bankruptcies were unexpected and most probably caused by the crisis. Once the COVID-19 crisis is over, existing bankruptcy models will need to be revalidated and recalibrated. [ FROM AUTHOR]

How does the COVID-19 affect earnings management: Empirical evidence from China.

Using China's A-share listed companies from 2018 to 2020, this paper examines the impact of COVID-19 on earnings management. The results reveal that: (1) The COVID-19 shock intensifies earnings management, which is reflected in the increasing accrual-based earnings management and real earnings management. Moreover, when enterprises face a higher degree of financial constraints, this shock effect is more evident. (2) Enterprises in industries and regions where COVID-19 is more severe are more affected by the suspension of work and production caused by the epidemic prevention policies, so these enterprises choose accrual-based earnings management through accounting items rather than carrying out earnings management through real activities. (3) Further analysis finds that, enterprises with more investment opportunities have more evident earnings management caused by the COVID-19 shock. However, high-quality auditing has an inhibitory effect on accrual-based earnings management caused by the COVID-19 shock but has no inhibitory effect on real earnings management.

The impact of risk-taking and auditor characteristics on value creation in pre-Covid 19 and post-Covid 19 pandemic

Purpose This study aims to investigate the impact of risk-taking and auditor characteristics on value creation in companies listed on the Tehran Stock Exchange. In addition, it investigates the moderator role of auditor characteristics in the impact of risk-taking on value creation, especially in pre-Covid 19 and post-Covid 19 pandemic. Design/methodology/approach The information about 199 company in 2014-2021 was examined. In the present study, in accordance with the related theoretical literature and the importance of auditor specialization, auditor tenure and auditor reputation, these factors were considered as the auditor characteristics. Findings The present findings based on the generalized least squares (GLS) method showed that risk-taking positively affects the value creation. The auditor characteristics (auditor specialization, auditor tenure and auditor reputation) have a significant positive effect on the value creation. Furthermore, the auditor characteristics enhance the impact of risk-taking on value creation. The results of generalized method of moments method and robust regression analysis are consistent with the GLS results. To take into account the Covid-19 conditions, the data were divided into pre-Covid-19 and post-Covid-19 years. The results showed that auditor characteristics moderate the impact of risk-taking on value creation in pre-Covid 19 and post-Covid 19. Originality/value The study highlights the role of auditor characteristics in the value creation, especially in the emerging market. Given that Covid-19 has seriously damaged global economic well-being and has put companies at a double risk, the present findings can be useful for managers, investors and the international community, and help company managers make risk-taking policies and select auditors with appropriate characteristics.

EARNINGS MANAGEMENT AND DIVIDEND PAYMENTS DURING THE COVID-19 PANDEMIC

The recent outbreak of coronavirus has caused the worst global economic crisis in the last few decades. A substantial number of companies have experienced severe economic difficulties and were tempted to adjust their financial figures in order to reach certain business thresholds. Maintaining an existing level of dividend payments is a powerful incentive to engage in such activities. The aim of this article was to estimate the effect of the economic crisis caused by the COVID-19 pandemic on the relationship between the estimated level of earnings management and dividend payments made by companies. Research models were estimated using panel analysis. The Modified Jones model was utilized to assess the level of earnings management. A total of 56 companies listed on the Zagreb Stock Exchange in the Republic of Croatia with their financial data from 2015 to 2020 were included in the research sample. Unlike in the case of absolute and income-decreasing discretionary accruals, results indicated that the economic crisis caused by the COVID-19 pandemic positively affected the relationship between earnings management and dividend payments in the case of income-increasing accruals regarding companies that made regular dividend payments. In conclusion, the economic crisis caused by the COVID-19 pandemic was an additional incentive for certain companies to perform income-increasing earnings management to reach the desired level of dividend payments. [ FROM AUTHOR]

Financial reporting quality during a crisis: a systematic review

Purpose This paper presents a systematic literature review, including content and bibliometric analyses, of the impact of a crisis on financial reporting quality. In addition, this review identifies emerging research themes and provides future directions. Design/methodology/approach The adopted systematic literature review approach finds 29 highly cited articles on the effect of a crisis on financial reporting quality, with an additional seven studies for analysis identified in a review of emerging literature. Findings This study consolidates prior research findings on financial reporting quality during a crisis under four major themes: (1) earnings quality and its determinants;(2) audit quality around a crisis;(3) conservatism, valuation effects and corporate governance;and (4) financial stability and regulations. Mixed and inconclusive findings are documented for most themes, suggesting that this literature is still in its infancy and that room exists for further theoretical refinement. Practical implications The study's findings potentially have important ramifications for managers, standard setters, government regulators and policymakers. By highlighting examples of changes in firms' reporting practices during a crisis, the study provides a context in which to understand the influence or potential influence of the current coronavirus (COVID-19) pandemic on firms' financial reporting practices. Originality/value To the best of the author's knowledge, this is the first study to systematically review and synthesise prior research findings on the quality of financial reporting during economic crises. The study identifies many unexplored research areas regarding crises, with possible direct implications for financial reporting practices. The impact of these issues needs to be carefully considered and understood, with the current coronavirus pandemic demonstrating that firms have the opportunity to compromise ethical aspects of their decisions as they experience pressure to maximise profits.

Covid-19 pandemic, a catalyst for aggressive earnings management by banks?

This paper investigates the effects of the Covid-19 pandemic on the financial reporting quality of European banks by examining the occurrence of earnings management specifically income smoothing. Using a sample of listed European banks, we employ panel estimation to compare income smoothing in the pre-pandemic period (2019Q1-2019Q4) and the pandemic period (2020Q1-2021Q4). We find that earnings management has significantly increased during the pandemic years, evidencing how the quality of financial reporting is affected during the crisis period. Our findings further suggest that amid the crisis, governance quality limits the incidence of earnings management and emphasizes how the strength of country-level governance and institutional framework affects the quality of financial reporting. Further analysis shows that though banks are inclined to manage earnings during a crisis, nevertheless, the presence of high-quality audit is a limiting factor on the incidence of earnings management in the face of crisis. Our findings which are relevant to investors, market participants, and regulators among others make a significant contribution to the accounting literature and specifically complement the strand of literature on the discretionary use of loan loss provision for earnings management during crisis.

Earnings quality determinants in pre-corona crisis: another insight from bank core capital categories

Purpose>Discretionary accruals are earnings quality proxies that illustrate that the greater the value of discretionary accruals, the greater the practice of earnings management and vice versa. High-quality financial reports (especially earnings quality) are expected to help investors and potential investors to make decisions. This study analyses the factors that affect earnings quality, such as pre-managed earnings, liquidity and efficiency. Furthermore, the authors identify the moderating effect of the governance mechanisms proxied by the proportion of independent commissioners in conventional commercial banks listed on the Indonesia Stock Exchange.Design/methodology/approach>This study uses 226 banking data in the pre-corona crisis period 2013 until 2019. The data were analyzed using EViews 10 for hypothesis and MS Excel for a differential test.Findings>The results show that pre-managed earnings, liquidity and efficiency affect earnings quality. The governance mechanisms can moderate liquidity and efficiency on earnings quality, while pre-managed earnings cannot be moderated. The different bank categories (BUKU) of earnings management mechanisms are shown for each BUKU (BUKU 1, 3 and 4 perform earnings management by increasing earnings, BUKU 2 lowering earnings). Another thing is information on the earnings quality between BUKU 2 with BUKU 3 and BUKU 4 because of differences in capital and bank operating coverage regulations.Research limitations/implications>Further research expects to analyze the factors affecting banking earnings quality concerning applying IFRS 9 (PSAK 71) in Indonesia. Future researchers expect to apply mixed methods to verify the financial statement data and provide comprehensive discussion and genuine insight from their study. Future research requires more samples from companies or an international scale (cross country) to obtain maximum results and be generally accepted.Practical implications>This study implies that managers should have more control over pre-managed earnings and bank liquidity as manager's incentive to do earnings smoothing. Managers should also pay attention to cost-efficiency and effective implementation of governance mechanisms to maximize earnings quality. This study also implies that policymakers can encourage commercial banks to apply more prudential principles in terms of a reserve for failed loans to minimize earnings management in banking.Originality/value>The significance of this study revealed in the discussion of the difference test between bank core capital categories (BUKU) and its relation to earnings quality.

EARNINGS QUALITY AND CORPORATE LIFE CYCLE BEFORE THE CRISIS. A STUDY OF TRANSPORT COMPANIES ACROSS EUROPE

Deteriorating macroeconomic conditions and plans to move to a green economy such as the Green Deal are putting pressure on both internal and external stakeholders to create a liquidity cushion in the event of unexpected expenditures. However, when analyzing reported earnings, which may constitute a source of internal financing, it is necessary to take into account the corporate life cycle, which changes the quality of reported earnings. The aim of the study is to identify and examine the impact of the corporate life cycle on the level of earnings quality in European transport companies in the pre-crisis years. A hierarchical linear mixed model was used to reveal these relationships, the sample included more than 30,000 companies covering the years 2011-2019 from 30 European countries. Discretionary accruals were used as quality proxy earnings, and the company's life cycle was modeled by the Dickinson cash flow model. Transport companies in Europe in the pre-crisis period had lowquality reported earnings. These enterprises manipulated earnings in accordance with the U-shaped curve, where mature firms applied downward earnings management techniques on average. Very large companies that were listed in the pre-crisis period chose upward earnings management, while smaller and unlisted companies opportunistically reduced reported earnings. These results imply that, in the pre-crisis period, European transport companies opportunistically obtained short-term benefits according to management requirements by reporting accounting profits other than cash flow. However, during the crisis and post-crisis years, they reduced their internal financing resources and/or affected the chances of obtaining state aid and other subsidies approved according to the accounting outputs.

Excess cash holding and audit pricing: a further consideration of precautionary motives and other factors

Purpose This paper aims to investigate auditors' pricing of excess cash holdings and the variation in their pricing decisions in light of the precautionary motives of cash holdings and certain firm-specific conditions and during periods of crisis. Design/methodology/approach The authors conduct the two-stage-least-squares multivariate analysis using a sample of publicly listed non-financial US firms for the period 2003 to 2021 (42,413 firm-year observations). Findings The findings show a significant positive relationship between excess cash and audit fee. Next, the authors find that audit pricing of excess cash is significantly higher for firms with lower financial constraints. However, the authors do not find evidence to suggest that auditors price excess cash significantly higher for firms with lower hedging needs. In additional analysis, the authors find evidence to suggest that auditors charge significantly less for excess cash in firms that report financial loss and firms operating in industries with high litigation risk. The additional analysis also reveals excess cash is not positively and significantly priced by auditors as a result of the global financial crisis and Covid-19 pandemic. Originality/value Most researchers have analyzed excess cash holding from the perspective of managers, i.e. agency conflict or managerial prudence, while somewhat neglecting auditors' perception of the embedded risk of excess cash holdings. The authors provide new insights on auditors' perspective of excess cash holding and identify certain factors/situation/conditions that cause variation in the audit fee premium. The findings offer useful insights for managers and shareholders who are interested in assessing the effects of excess cash holdings policies on the audit fee premium.

The development of corporate governance literature in Malaysia: a systematic literature review and research agenda

Purpose>This study aims to provide a comprehensive review of the existing literature on corporate governance (CG) aspects of the Malaysian market. It offers insights into the phases of Malaysian CG, identifies crucial gaps in the literature and outlines an agenda for impending research.Design/methodology/approach>Following a systematic literature review approach, a final sample of 125 studies from Scopus and Web of Science databases was used in this study. These studies were selected based on quality assessment criteria. Then, the sample literature was evaluated in terms of journals, methodology, theories, modelling, research outcomes and CG characteristics.Findings>The results show that there is a growing interest among researchers to further explore CG aspects in Malaysia due to the continuous development of the Malaysian CG codes. Likewise, the review reveals that the majority of prior studies are quantitative and were carried out using archived data from non-financial firms. Also, the existing literature has primarily focused on the outcomes of CG, especially firm performance.Research limitations/implications>Overall, the results show that there is ample room for future research. The present paper identifies a number of methodological problems and concerns, and discusses the implications of these problems, while also providing recommendations for future research. The main caveat is that the authors use scholarly papers published in academic journals only, but this approach offers them with opportunities for considerable further developments.Originality/value>To the best of the authors’ knowledge, this study contributes to the literature by being the first of its kind to concentrate on the Malaysian context. It provides a comprehensive knowledge assessment of the Malaysian CG research and offers advice regarding improvements in research, policy and practice by identifying possible knowledge gaps. Consequently, this study provides a cohesive story of the past and a road map for future research on Malaysian CG.

The impact of financial distress, sustainability report disclosures, and firm size on earnings management in the banking sector of Indonesia, Malaysia, and Thailand

Research Question: Does financial distress, sustainability report disclosures, and firm size have an effect on earnings management? Motivation: Researchers want to know the effect of financial distress, sustainability report disclosures, and firm size on earnings management. Idea: The purpose of this paper is to determine the impact of Financial Distress (FD), Sustainability Report (SR), and Firm Size (FS) on earnings management in the banking sector of Indonesia, Malaysia and Thailand. Data: The data for this research is taken from the financial reports, annual reports, and sustainability reports issued by the companies from 2019 to 2020. The populations in this study are banking companies listed on the Indonesian, Malaysian, and Thailand Stock Exchanges. The samples used are 43 public banking companies in Indonesia, 10 public banking companies in Malaysia, and 8 public banking companies in Thailand. Tools: This study uses a regression model made with E-Views 10. Findings: The results show that financial distress has a significant influence on earnings management, sustainability reports have no influence on earnings management, and firm size has an influence on earnings management, but only in Malaysia's and Thailand's banking companies. Contribution: The results of this study are expected to provide ideas and reference materials regarding financial distress, disclosure of corporate sustainability reports, firm size, and earnings management practices. For companies, especially from the banking sector, this study is expected to provide information that they must be careful in reporting financial statements that will be published considering that banking companies are a business entity that receives and safeguards money owned by the public and lends out this money in the form of loans or credits. Banks are the main financial institutions in the financial system that drive the economy in a country. If a banking company experiences a financial crisis, it will have a wide impact on the financial system and economic sector in a country. The results of this study are also expected to help investors make investment decisions in a company and the results of this study are expected to help creditors in making funding decisions in a company.

Financial Performance and Accounting Choices in the Pandemic Period: Effects on Earnings Management of Companies Listed on B3.

This study investigated whether the pandemic scenario caused by COVID-19 affected the performance of companies listed on the Stock Exchange and influenced the realization of accounting choices that raised the levels of earnings management to improve performance indicators. The methodology used was descriptive, hypothetical-deductible, quantitative and documentary. The final sample consisted of 310 companies listed on Brasil, Bolsa and Balcão (B3), with 6,522 quarterly observations, referring to the period 2015 to 2021. For the calculation of discretionary accruals, the model of Dechow, Hutton, Kim and Sloan was used (2012). The variables analyzed were obtained from the Economatica® database. The statistical techniques were descriptive analysis, Pearson's correlation and panel data, operated by the STATA® software. The results showed that the pandemic scenario affected the performance of companies on the Stock Exchange, influencing the accounting choices made and raising the levels of earnings management to improve performance indicators and avoid fluctuations in quarterly results. The study findings contribute to the earnings management literature, considering a unique scenario (COVID-19 pandemic) and an emerging economy. In addition, there are contributions to organizational practice, especially for managers and those involved in corporate decision-making. (English) [ FROM AUTHOR] Este estudo investigou se o cenário pandêmico causado pela COVID-19 afetou o desempenho das empresas listadas na Bolsa de Valores e influenciou na realização de escolhas contábeis que elevaram os níveis de gerenciamento de resultados para melhorar os indicadores de desempenho. A metodologia utilizada foi descritiva, hipotético-dedutível, quantitativa e documental. A amostra final foi composta por 310 empresas listadas no Brasil, Bolsa e Balcão (B3), com 6.522 observações trimestrais, referentes ao período 2015 a 2021. Para a apuração dos accruals discricionários, foi utilizado o modelo de Dechow, Hutton, Kim e Sloan (2012). As variáveis analisadas foram obtidas pelo banco de dados da Economatica®. As técnicas estatísticas foram a análise descritiva, correlação de Pearson e dados em painel, sendo operacionalizado pelo software STATA®. Os resultados demonstraram que o cenário pandêmico afetou o desempenho de empresas da Bolsa de Valores, influenciando nas escolhas contábeis realizadas e elevando os níveis de gerenciamento de resultados para melhorar os indicadores de desempenho e evitar oscilações nos resultados trimestrais. Os achados do estudo contribuem para a literatura de gerenciamento de resultados, considerando um cenário ímpar (pandemia de COVID-19) e uma economia emergente. Além disso, existem contribuições para a prática organizacional, especialmente para os gestores e envolvidos na tomada de decisões das empresas. (Portuguese) [ FROM AUTHOR] Copyright of Revista FSA is the property of Revista FSA (Faculdade Santo Agostinho) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full . (Copyright applies to all s.)