Influence of Culture on Earnings Management: A Note

• Autores: Timothy S. Doupnik
• Localización: Abacus: A journal of accounting, finance and business studies, ISSN 0001-3072, Vol. 44, Nº 3, 2008, págs. 317-340
• Idioma: inglés
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• Dialnet Métricas: 8 Citas
• Resumen

  • This article examines the influence of national culture on earnings management across a broad cross-section of countries. In addition to examining the relation between culture and earnings management in general, two different types of earnings management are examined, namely, earnings smoothing and earnings discretion. Regression results indicate that, as expected, the cultural dimensions of uncertainty avoidance and individualism are significantly related to earnings management, even after controlling for investor protection and other legal institutional factors. Culture has a stronger relation with earnings smoothing than with earnings discretion, and cultural dimensions explain a greater percentage of the variation in aggregate earnings management and earnings smoothing than do investor protection variables. These findings suggest that there is a significant link between culture and cross-national differences in earnings management, especially in the form of earnings smoothing.