Perceptions of earnings management: the effects of national culture

Geiger, Marshall A., O'Connell, Brendan, Clikeman, Paul M., Ochoa, Elena, Witkowski, Kristen, and Basioudis, Ilias (2006) Perceptions of earnings management: the effects of national culture. Advances in International Accounting , 19. pp. 175-199.

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Abstract

Manipulating, or “managing,” reported earnings is a temptation faced by every accountant and corporation around the world. This study investigates whether national culture influences perceptions of the acceptability of earnings management. Participants from eight countries evaluated 13 vignettes describing various earnings management practices (Merchant & Rockness, 1994). Our results demonstrate considerable variation in perceptions across nations to the earnings management scenarios, providing strong evidence that the practice of earnings management was not perceived similarly in all countries. Using Hofstede's (1991) cultural indices, we find that the differences in aggregate perceptions across countries were not closely associated with any of the cultural dimensions examined. We do, however, find that perceptions of earnings manipulations involving the timing of operating decisions were associated with both the Power Distance Index and the Masculinity Index.

Item ID: 4009
Item Type: Article (Refereed Research - C1)
ISSN: 0897-3660
Date Deposited: 13 Nov 2009 05:01
FoR Codes: 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1501 Accounting, Auditing and Accountability > 150105 Management Accounting @ 100%
SEO Codes: 90 COMMERCIAL SERVICES AND TOURISM > 9001 Financial Services > 900199 Financial Services not elsewhere classified @ 100%
Citation Count from Scopus Scopus 4
Downloads: Total: 1
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