DOES EARNINGS MANAGEMENT CHANGE AFTER THE ADOPTION OF THE IFRS? EVIDENCE FROM ROMANIA

Once that International Financial Reporting Standards are used for individual financial reporting, we expect that companies are going to achieve an increase in the financial reporting due to a higher degree of transparency. The present research tries to emphasize if there is any significant differen...

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Bibliographic Details
Published in:Financial Studies 2016-01, Vol.20 (1), p.21-36
Main Authors: Brad, Laura, Ciobanu, Radu, Dobre, Florin
Format: Article
Language:English
Subjects:
Accounting
Bootstrap finance
Capital markets
Cash flow
Corporate profits
Earnings management
Financial institutions
Financial performance
Financial statements
international accounting regulation
International Financial Reporting Standards
Regulation
romanian accounting standards
Stock exchanges
Stock market delistings
Studies
Volatility
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Summary:Once that International Financial Reporting Standards are used for individual financial reporting, we expect that companies are going to achieve an increase in the financial reporting due to a higher degree of transparency. The present research tries to emphasize if there is any significant difference between the value of earnings management computed by using the national and the international accounting measures. The research is conducted on Romanian capital market, into the listed companies. The results of the research are mixed. While an improvement in the variability of net profit is observed (both for individual and bootstrapping with replacement analysis), the correlation between accruals and cash flow from operation is more negative (using both estimations techniques). The results on the differences of cash flow from operations also show an increase in the value of earnings management.
ISSN:2066-6071