Earnings management, firm size & financial performance : the case of Greece

• Κύριος συγγραφέας: Ζάκκα, Φωτεινή
• Άλλοι συγγραφείς: Zakka, Fotini
• Γλώσσα: English
• Έκδοση: 2021
• Θέματα: Earnings management; Accruals; Firm size; Profitability; Leverage; Χειραγώγηση κερδών; Δεδουλευμένα; Μέγεθος επιχείρησης; Κερδοφορία; Μόχλευση

The present dissertation was conducted within the framework of the Postgraduate Program in Applied Economics and Data Analysis of the University of Patras and is based on international literature. The purpose of the dissertation is to present a literature review of earnings management issue as well as to conduct empirical research on the impact of the main characteristics of a company on the level of the use of earnings management practices. In the present dissertation, an empirical research is carried out on a sample of Greek companies in the period from 2003 to 2014. Using data from the balance sheets of these companies and using the modified Jones model (1995), earnings management was detected. Then, it was examined whether their key features such as size, profitability and leverage affect the level of earnings management. The results showed that the size of the firm affects negatively the abnormal accruals while the profitability affects positively the abnormal accruals. Financial leverage did not seem to have any statistically significant relationship with earnings management. The first chapter gives an overview of creative accounting and earnings manipulation. The second chapter is a literature review on the subject. It includes, first of all, the definitions that have been given on this subject. The following is a presentation of the incentives that motivate businesses to adopt practices by which they modify their profits as well as the methods through which this is achieved. The third chapter presents the models used in the literature to identify the use of earnings management by a company. The fourth chapter includes the research hypothesis, the description of the sample and the methodology used. The fifth chapter presents the results of the empirical analysis and finally at the sixth chapter are the conclusions of the study.