Earnings management and the readability of explanatory notes: accounting information manipulation
DOI:
https://doi.org/10.17524/repec.v17i1.3214Keywords:
Ease of Reading, Earning Management, ObfuscationAbstract
Objective: This study aims to verify the relationship between the readability level of explanatory notes and earnings management among companies listed in [B]3 between 2010 e 2018.
Method: An econometric method was used. Readability was the dependent variable, and earnings management was the primary independent variable, in addition to control variables, analyzed through panel data regression with fixed effects controlled by year and sector.
Results: The results show no statistically significant relationship between the readability levels of explanatory notes and earnings management levels, even when compared to companies that most frequently use earnings management. The results are robust, considering that additional results present coefficients in the same direction and significance.
Contributions: This study contributes to the accounting literature as it studies this relationship in a Portuguese-speaking emergent market. Additionally, it supports the understanding of users of accounting information regarding the ease of reading explanatory notes to support decision-making.
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