Assessing Earnings Quality of Greek Public Hospitals

Abstract

Purpose: This paper examines the factors that affect the Net Income of Greek public hospitals for the period 2015-2018. The main objective is to explore whether there is evidence for accounting principles violation. Methodology: A representative sample of 107 public hospitals which accounts almost the 85% of the total, is chosen to construct a dataset that contains information about the type of hospital, the number of hospitalized patients and other variables that are taken from the financial statements. Furthermore, this study adopts the OLS method in order to draw relative conclusions. Findings: We conclude that differences in the applied accounting policies from the Greek Public Hospitals significantly affect their Net Income. Specifically, we observe that hospitals who apply a more conservative receivables accounting do not seem to be significantly affected by the government policies, while hospitals apply less conservative accounting policies significantly affected by government policies. Originality: This study is the first one to examine the effect of the government decision to grant Greek Public Hospitals in 2016 on their earnings. Furthermore, as accounting data is publicly available relatively recently (2011) accounting research regarding Greek Public Hospitals is scarce.