University of Sussex
Browse
SSRN-id2668910.pdf (846.34 kB)

Does religion matter for earnings management?

Download (846.34 kB)
report
posted on 2023-06-09, 01:23 authored by Eric Owusu Boahen, Emmanuel C Mamatzakis
This paper explores the nexus between earnings management and religiosity. It complements prior research on the impact of religious social norms of the firm’s environment on earnings management practices. Using a sample of 11,105 U.S. firm-year observations between 2004 and 2013, we find that religiosity is negatively associated with the accruals-based method, but positively related to both real-activities and classification shifting. This suggests that religiosity could serve as a correction mechanism to accruals earnings management practices. However, managers in highly religious areas consider real- activities and classification shifting as ethically and morally appropriate. In addition, we interact religiosity measures with governance variables to provide evidence of the importance of religion in relation to board characteristics. As part of robustness analysis we examine the impact of religion in high and low religious areas, as well as in urban and rural areas. Our findings remain robust and argue in favour of the importance of religious social norms in earnings management.

History

Publication status

  • Published

File Version

  • Published version

Publisher

Social Science Research Network

Department affiliated with

  • Business and Management Publications

Full text available

  • Yes

Legacy Posted Date

2016-05-26

First Open Access (FOA) Date

2016-05-26

First Compliant Deposit (FCD) Date

2016-05-26

Usage metrics

    University of Sussex (Publications)

    Categories

    No categories selected

    Exports

    RefWorks
    BibTeX
    Ref. manager
    Endnote
    DataCite
    NLM
    DC