Abstract
This chapter intends to contribute to the analysis and comparison of the earnings management (EM) practices through a bibliometric review of the existent literature, in order to understand the current state of EM research, as well as to identify the main determinants for these kind of practices in firms. Although there are extensive research on EM, no recent study tries to update the current state of the research over this topic. To do so, a bibliometric analysis is conducted. The study describes the evolutional research studies published in the digital library Scopus, between 2010 and 2019, and compares the results obtained in evolutionary terms. It ends up concentrating the bibliometric analysis in the Scopus database, leading to a total database of 2,377 documents. Regarding the most recent articles published, the years of 2019 and 2020 were studied, ending with a final sample of 389 articles. Research avenues are provided based on these results and more recent published articles regarding EM.
TopBrief Literature Review On Earnings Management
Some reasons motivate firms to practice actions of EM, namely to smooth earnings, avoiding positive or negative picks (Abeyratna & Power, 2002), or to reach a target in earnings level (Buckmaster, 2001; Leuz, Nanda, & Wysocki, 2003). However, studies are finding no evidence of significant EM practices, such as Ball and Shivakumar (2005). The authors believe that different country's specificities can cause different evidence among them, such as the development of the regulatory framework, the capital markets development, the investor protection in the different countries, the concentration of property, and the type of property (family versus non-family firms).
Key Terms in this Chapter
Earnings Management: Is the use of accounting techniques to produce financial statements that present an overly positive view of a company's business activities and financial position. Many accounting rules and principles require that a company's management make judgments in following these principles. Earnings management takes advantage of how accounting rules are applied and creates financial statements that inflate or “smooth” earnings.
Corporate Governance: Is the system of rules, practices, and processes by which a firm is directed and controlled. Corporate governance essentially involves balancing the interests of a company's many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, the government, and the community. Since corporate governance also provides the framework for attaining a company's objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure.
Bibliometric Analysis: Is the attempt to quantitatively assess the academic quality of journals or authors by statistical methods such as citation rates.
Content Analysis: Is the study of documents and communication artifacts, which might be texts of various formats, pictures, audio or video. Social scientists use content analysis to examine patterns in communication in a replicable and systematic manner.
Measurement: Is the numerical quantitation of the attributes of an object or event, which can be used to compare with other objects or events. The scope and application of measurement are dependent on the context and discipline.