Earnings management strategies in BrazilDeterminant costs and temporal sequence

  1. Cesar Medeiros Cupertino 1
  2. Antonio Lopo Martinez 2
  3. Newton C.A. da Costa Jr 1
  1. 1 Federal University of Santa Catarina, Brazil
  2. 2 Fucape Business School, Brazil
Journal:
Contaduría y administración

ISSN: 0186-1042,  2448-8410

Year of publication: 2017

Volume: 62

Issue: 5

Pages: 1460-1478

Type: Article

DOI: 10.1016/J.CYA.2016.11.002 DIALNET GOOGLE SCHOLAR lock_openDialnet editor

More publications in: Contaduría y administración

Abstract

This paper describes a study that analyses earnings management strategies involving accounting choices or real activities in Brazil. An analysis is conducted of the relationships between earnings management strategies their determinant costs and of the temporal sequence in which these management strategies are applied. The results of empirical tests indicate that adoption of management strategies is dependent on their relative costs. There is a temporal relationship between the two types of strategies for manipulation of year-end results, with real activities preceding accounting choices. It was also observed that the level of manipulation by accruals (real activities) reduced (increased) after adoption of the IFRS in Brazil.

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