Earnings management by classification shifting and corporate governance in Brazil

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Main Author: Alan Diógenes Góis
Format: Artículo científico
Language:en
Published: Universidade do Vale do Rio dos Sinos 2020
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author Alan Diógenes Góis
author_facet Alan Diógenes Góis
contents Earnings management by classification shifting and corporate governance in Brazil Alan Diógenes Góis Paulo Henrique Nobre Parente Administración y Contabilidad Earnings Management Corporate Governance Classification Shifting Classification shifting is a new approach of earnings management, which verifies when there is a deliberate change in the classification of items in the income statement for the year, withdrawing items from core earnings and assigning for special items. As corporate governance reduces opportunistic behavior of the manager, this paper aims to verify the influence of corporate governance in earnings management by classification shifting. For this purpose, 236 publicly-traded companies listed in Brasil, Bolsa, Balcão (B3) between 2005 and 2016 were analyzed. As a metric for earnings management, the classification shifting proposed by McVay (2006) was used, and as metrics of corporate governance, the differentiated levels of corporate governance provided by B3 were used. findings show that earnings management by classification shifting happens in Brazil, and corporate governance, measured by the differentiated levels of corporate governance of B3, is a factor that reduces the classification shifting, thus, governance is able to change the behavior of the manager. Therefore, corporate governance is a relevant attribute for companies vis-à-vis investors, because it ensures the trust and transparency of the disclosed information. 2020 artículo científico 1984-8196 https://www.redalyc.org/articulo.oa?id=337264552006 https://www.redalyc.org/journal/3372/337264552006/ https://www.redalyc.org/journal/3372/337264552006/html/ https://www.redalyc.org/journal/3372/337264552006/337264552006.epub https://www.redalyc.org/journal/3372/337264552006/movil en http://www.redalyc.org/revista.oa?id=3372 Base Revista de Administração e Contabilidade da UNISINOS application/pdf Universidade do Vale do Rio dos Sinos Base Revista de Administração e Contabilidade da UNISINOS (Brasil) Num.1 Vol.17
format Artículo científico
id redalyc_337264552006
institution Redalyc
language en
publishDate 2020
publisher Universidade do Vale do Rio dos Sinos
spellingShingle Earnings management by classification shifting and corporate governance in Brazil
Alan Diógenes Góis
Administración y Contabilidad
Earnings Management
Corporate Governance
Classification Shifting
Earnings management by classification shifting and corporate governance in Brazil Alan Diógenes Góis Paulo Henrique Nobre Parente Administración y Contabilidad Earnings Management Corporate Governance Classification Shifting Classification shifting is a new approach of earnings management, which verifies when there is a deliberate change in the classification of items in the income statement for the year, withdrawing items from core earnings and assigning for special items. As corporate governance reduces opportunistic behavior of the manager, this paper aims to verify the influence of corporate governance in earnings management by classification shifting. For this purpose, 236 publicly-traded companies listed in Brasil, Bolsa, Balcão (B3) between 2005 and 2016 were analyzed. As a metric for earnings management, the classification shifting proposed by McVay (2006) was used, and as metrics of corporate governance, the differentiated levels of corporate governance provided by B3 were used. findings show that earnings management by classification shifting happens in Brazil, and corporate governance, measured by the differentiated levels of corporate governance of B3, is a factor that reduces the classification shifting, thus, governance is able to change the behavior of the manager. Therefore, corporate governance is a relevant attribute for companies vis-à-vis investors, because it ensures the trust and transparency of the disclosed information. 2020 artículo científico 1984-8196 https://www.redalyc.org/articulo.oa?id=337264552006 https://www.redalyc.org/journal/3372/337264552006/ https://www.redalyc.org/journal/3372/337264552006/html/ https://www.redalyc.org/journal/3372/337264552006/337264552006.epub https://www.redalyc.org/journal/3372/337264552006/movil en http://www.redalyc.org/revista.oa?id=3372 Base Revista de Administração e Contabilidade da UNISINOS application/pdf Universidade do Vale do Rio dos Sinos Base Revista de Administração e Contabilidade da UNISINOS (Brasil) Num.1 Vol.17
title Earnings management by classification shifting and corporate governance in Brazil
topic Administración y Contabilidad
Earnings Management
Corporate Governance
Classification Shifting
url https://www.redalyc.org/articulo.oa?id=337264552006
https://www.redalyc.org/journal/3372/337264552006/
https://www.redalyc.org/journal/3372/337264552006/html/
https://www.redalyc.org/journal/3372/337264552006/337264552006.epub
https://www.redalyc.org/journal/3372/337264552006/movil