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Earnings Management in SMEs: Evidence From Portugal and Spain

Earnings Management in SMEs: Evidence From Portugal and Spain

Andreia Sousa, Cristina Gonçalves Góis, Clara Viseu
Copyright: © 2019 |Pages: 26
ISBN13: 9781522578178|ISBN10: 152257817X|ISBN13 Softcover: 9781522585947|EISBN13: 9781522578185
DOI: 10.4018/978-1-5225-7817-8.ch005
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MLA

Sousa, Andreia, et al. "Earnings Management in SMEs: Evidence From Portugal and Spain." International Financial Reporting Standards and New Directions in Earnings Management, edited by Jonas da Silva Oliveira, et al., IGI Global, 2019, pp. 101-126. https://doi.org/10.4018/978-1-5225-7817-8.ch005

APA

Sousa, A., Góis, C. G., & Viseu, C. (2019). Earnings Management in SMEs: Evidence From Portugal and Spain. In J. Oliveira, G. Azevedo, & A. Ferreira (Eds.), International Financial Reporting Standards and New Directions in Earnings Management (pp. 101-126). IGI Global. https://doi.org/10.4018/978-1-5225-7817-8.ch005

Chicago

Sousa, Andreia, Cristina Gonçalves Góis, and Clara Viseu. "Earnings Management in SMEs: Evidence From Portugal and Spain." In International Financial Reporting Standards and New Directions in Earnings Management, edited by Jonas da Silva Oliveira, Graça Maria do Carmo Azevedo, and Augusta da Conceição Santos Ferreira, 101-126. Hershey, PA: IGI Global, 2019. https://doi.org/10.4018/978-1-5225-7817-8.ch005

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Abstract

Although small and medium-sized enterprises (SMEs) are represented on a large scale around the world, the literature on earnings management (EM) has focused mainly on listed firms. In this sense, this chapter provides important insights on the determinants and main incentives for EM in the context of Portuguese and Spanish SMEs, over a period of 10 years, also considering two relevant macroeconomic events (financial crisis and entry into force of harmonized accounting regulations). The results obtained are similar for both countries and are intended to underline the possible positive effects of reducing these practices after the entry into force of a harmonized accounting standard with the International Accounting Standards Board (IASB) standards and also to warn against the possible negative effects of managers' opportunistic behavior during a period of financial crisis. The close association between accounting and taxation, since the calculation of the tax income depends partly on the accounting income, remains an incentive to engage in EM practices.

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