Corporate social responsibility and earnings management in France: do politically connected CEOs shape ethical reporting?

The research aims to explore the links among corporate governance, corporate social responsibility, and earnings management, considering vital roles of each component in Vietnam. There were 500 questionnaires provided to the targeted enterprises, where there were 150 enterprises in Ho Chi Minh Stock Exchange, 150 enterprises in Hanoi Stock Exchange, and 200 enterprises in the unlisted public company market. Of the distributed questionnaires, only 289 replies offered needed information for analyses. The data derived from these firms was based on their annual or sustainability statements that were retrieved from the websites. This research used a six-year rolling window to calculate earnings management. To compute that variable, lagged year information was included, so the data from 2011 to 2017 was needed to collect. The empirical results show that corporate governance mechanism is a significant moderation in the positive link between good corporate social responsibility and earnings management. Furthermore, corporate social responsibility and earnings management also play mediating roles in the associations among corporate governance, corporate social responsibility, and earnings management. This project recommends that corporate governance mechanism is an essential driver of the managerial behaviors in social responsibility and ethical accounting practices, which are in turn mediators in the joint research model.

Previous studies explain the association between corporate social responsibility and earnings management from the stakeholders', legitimacy, agency and singling theories. This research aims to explore this relation from psychological and behavioural theory perspective. We deal with the psychological characteristics of the manager such as the manager's reasoning, overconfidence and affects (shame and guilt). This article shows that the manager's psychology may influence significantly his attitude toward corporate social responsibility and earnings management. Accordingly, the psychological feature may explain and determine the relation between corporate social responsibility and earnings management.

Previous studies explain the association between corporate social responsibility and earnings management from the stakeholders', legitimacy, agency and singling theories. This research aims to explore this relation from psychological and behavioural theory perspective. We deal with the psychological characteristics of the manager such as the manager's reasoning, overconfidence and affects (shame and guilt). This article shows that the manager's psychology may influence significantly his attitude toward corporate social responsibility and earnings management. Accordingly, the psychological feature may explain and determine the relation between corporate social responsibility and earnings management.

This paper provides insight to whether Corporate Social Responsibility (CSR) and earnings management are connected. Based on the agency- and stewardship theory the author conducts a literature review and evaluates the empirical results with regard to the CSR-earnings management and the earnings management-CSR link. In this context, CSR reporting and CSR performance are focused as CSR measures. The results of the 33 studies indicate that the majority of the research relies on the CSR-earnings management link, on the US-American capital market and on CSR performance measures. Most of these studies indicate that CSR relates to decreased earnings management in line with the stewardship theory. However, also other results exist on the CSR earnings management link. Research on the earnings management-CSR relationship is of low validity so far in view of the low amount. Comparability of recent research on that topic is in particular limited in view of the heterogeneous CSR and earnings management variables and the endogeneity concerns. Future research is encouraged to address endogeneity tests, include country-specific effects and increase the validity of CSR and earnings management variables. As CSR performance and reporting can have a major impact on earnings quality, the author recommends firms to search for opportunities to make their CSR activities more comprehensive by expanding their CSR reporting and thus providing deeper insights on their CSR performance in line with stakeholders’ interests. The paper is the first literature review on the CSR-earnings management and earnings management-CSR relationship so far. The author explains the main CSR and earnings management variables that have been included in prior empirical research, stresses the limitations of the studies and gives useful recommendations for future research, practice and regulators

PurposeThis paper aims to investigate the relationship between corporate social responsibility (CSR) and earnings management (EM) in US commercial banks and examines whether the chief executive officer (CEO) power can moderate this relationship.Design/methodology/approachFor a sample of American commercial banks covering 2009–2018, several equations and regressions are used to measure the main proxies for bank EM. The authors use the fixed effects model and generalized method of moment to investigate the CSR–EM relationship.FindingsThe authors find a significant positive relation between CSR and EM. Moreover, the authors find that CEO power moderates the CSR–EM relationship. This study also suggests a bidirectional relationship between CSR and EM.Research limitations/implicationsThe findings of this paper have important policy implications for policymakers, regulators and investors in their attempts to constrain EM practices and enhance the quality of financial reporting in US commercial banks.Originality/valueThe study contributes to the literature by exploring the relationship between CSR practices and firm EM by particularly focusing on banking. This study offers new insights into whether the association between CSR practices and EM is moderated by the CEO power. To the best of the knowledge, the relationship between CSR and EM is not studied yet with the moderating role of CEO power.

The purpose of this study is to examine the relationship of corporate social responsibility (CSR) on earnings management and the impact of and audit firm size on the association between corporate social responsibility (CSR) and earnings management, the association between Profitability and Earning Management and the association between Leverage and Eaning Management. The dependent variable that used in this study is earnings management. Corporate social responsibility (CSR), Profitability, and Leverage used as independent variable. Furthermore, this study used audit firm size as a moderating variable. The sample in this study consists of 117 mining companies that listed on Indonesia Stock Exchange in the period 2016-2020. The data that used in this study was secondary data and selected by using purposive sampling method. The technique of analysis used for examining the hypothesis was multiple regression analysis Based on the empirical results of this study show that corporate social responsibility (CSR) has positive significant influence on earnings managements but not significant in profitability and leverage with earning management. This study did not find the association of audit firm size between profitability and earnings management, but this study found the association of audit firm size between corporate social responsibility (CSR) and earnings management and also found the association of audit firm size between leverage and earning management.

Social and economic activities, like religion, entertainment, education, research, and the production of other goods and services, are carried on by different types of organizations, for example, corporations, proprietorships, partnerships, mutuals and nonprofits. There is competition among organizational forms for survival. The form of organization that survives in an activity is the one that delivers the product demanded by customers at the lowest price while covering costs. The characteristics of residual claims are important both in distinguishing organizations from one another and in explaining the survival of organizational forms in specific activities. This paper develops a set of propositions that explaim the special features of the residual claims of different organizational forms as efficient approaches to controlling agency problems. © M. C. Jensen and E. F. Fama, 1983 Michael C. Jensen, Foundations of Organizational Strategy Chapter 6, Harvard University Press, 1998. Journal of Law & Economics, Vol XXVI (June 1983) This document is available on the Social Science Research Network (SSRN) Electronic Library at: http://papers.ssrn.com/sol3/paper.taf?ABSTRACT_ID=94032 AGENCY PROBLEMS AND RESIDUAL CLAIMS

The link between corporate social responsibility (CSR) and earnings management represents an attractive empirical research topic in recent years. In view of the heterogeneous research results, the purpose of this structured literature review is to analyze the contextual factors of this complex relationship. We selected 107 quantitative peer‐reviewed archival studies on that topic and explain a possible positive and negative link between CSR and earnings management by the moral licensing hypothesis (principal agent theory) and the moral track hypothesis (stakeholder theory). We focus on firm‐ and country‐related moderator effects as contextual factors. Country‐specific studies are separated in developed (Anglo‐American and Continental European settings) and developing countries (African and Asian settings), code and case law regimes as well as the degree of shareholder protection and legal enforcement. In line with stakeholder theory, we stress that most of the included studies found a negative impact of CSR on earnings management with a focus on CSR performance and accruals‐based earnings management. Other measures, for example, CSR reporting, sub‐pillars of CSR performance, and real earnings management, are inconclusive due to reduced research activity. We do not find any structural changes between developed and developing countries, case and code law regimes, and regarding the strength of shareholder protection and legal enforcement. However, there are clear indications that corporate and country governance strengthens (weakens) the negative (positive) influence of CSR on earnings management. We stress major limitations of prior research and formulate useful recommendations for future research.

This study examined the effect of the components of corporate social responsibility (CSR) and earnings management on market value, measured using Tobin's Q. CSR is measured by using KLD Index, while earnings management used discretionary loan loss provision. The GMM-SYS (generalized method of moment system) dynamic panel data method is employed to examine the research framework on conventional banks listed in Indonesia Stock Exchange. Among six components in CSR disclosures, only corporate governance, environmental and product disclosures are favorable for bank's market value. Furthermore, earnings management had a positive impact on market value. Empirical result indicated that CSR functions as a part of bank strategic moves in order to survive the highly dynamical business environment. Since CSR inflicts additional costs for the company, they must perform CSR efficiently while maintaining a strong relationship with shareholders. This study contributes to CSR and financial management literature by finding the nature of CSR effects as future strategic investment.

This paper examines the relationship between Earnings Management (EM) practices and Corporate Social Responsibility (CSR) and how this relationship is affected by political connection. Our study is motivated by conflicting evidence in the extant literature about the role of CSR in reducing earnings management. The key contribution of this paper is our investigation of the effects of political connection on the link between CSR engagement and EM. To our knowledge, no study in the accounting literature has explored this moderating effect of political connection on the CSR/EM relationship. Using a sample of 133 French companies listed on the CAC All Tradable index for the 2010-2020 period, our results verify a negative influence of CSR on EM with its different proxies. Which means that French firms with CSR in mind tends not to engage in EM operations. We also conclude that political connections moderate the relationship between CSR practices and EM. The results remain unchanged after a battery of robustness tests.

This study examined the effect of the components of corporate social responsibility (CSR) and earnings management on market value, measured using Tobin's Q. CSR is measured by using KLD Index, while earnings management used discretionary loan loss provision. The GMM-SYS (generalized method of moment system) dynamic panel data method is employed to examine the research framework on conventional banks listed in Indonesia Stock Exchange. Among six components in CSR disclosures, only corporate governance, environmental and product disclosures are favorable for bank's market value. Furthermore, earnings management had a positive impact on market value. Empirical result indicated that CSR functions as a part of bank strategic moves in order to survive the highly dynamical business environment. Since CSR inflicts additional costs for the company, they must perform CSR efficiently while maintaining a strong relationship with shareholders. This study contributes to CSR and financial management literature by finding the nature of CSR effects as future strategic investment.

China‘s corporate social responsibility and earnings management activities are in the stage of continuous improvement, as the key parts of corporate financial management, both of them must be paid attention to. This paper takes listed A-share companies as the research object, taking social responsibility and earnings management as the explanatory variables respectively, and introducing financial leverage as the adjustment variable, and constructs three models, so as to explore the possible relationship between listed companies‘ social responsibility and earnings management, provide effective basis for listed companies to actively practice social responsibility, improve earnings management, and promote the coordinated and sustainable development of the whole society and national economy. Finally, according to the research conclusion, the corresponding measures and suggestions are put forward, and a long-term strategic long-term mechanism to fulfill corporate social responsibility is established to ensure the long-term and continuous investment of corporate social responsibility.

The relationship between corporate social responsibility (CSR) and earnings management (EM) has only emerged recently as a topic of academic research. Literature suggests that firms may strategically use CSR to compensate for EM or to deflect stakeholder attention from EM. Studies on the EM-CSR relationships have so far yielded contradictory results. Additionally, research has largely neglected the influence of industry on this relationship. As scholars of both CSR and EM have suggested that industry effects may play a role, this study examines the relationship between the level of CSR performance of companies, the extent of EM firms are practising and the effect of industry (high vs. low environmental impact as a proxy for experienced stakeholder pressure). Using the Modified Jones model, discretionary accruals are estimated and used as a proxy for EM (accrual-based EM). Firm CSR performance is captured by using the Kinder, Lydenberg, Domino (KLD) database. Using a sample consisting of 5494 observations of US listed companies for the fiscal years 2003 until 2009, this study (1) finds no relationship between EM and CSR and (2) finds that the firms in the category high environmental impact do not seem to practice EM but do display higher levels of CSR performance. Finally, the article reflects critically on the concepts used in studying the EM-CSR relationship and its contribution to the literature.

Background: Enron was considered a strong corporate social performer when their infamous accounting scandal emerged in 2000. Literature suggests that companies use corporate social responsibility (CSR) to disguise corporate misconduct. Aim and Setting: This study examines one type of corporate misconduct, namely, earnings management (EM). Prior studies have found significant associations between CSR performance and EM; however, none of these studies controlled for CSR disclosure. This study unbundles the effects of CSR performance and CSR disclosure on EM. To examine the relationship between CSR performance and CSR disclosures and EM of listed South African companies. Methods: A company included on the Socially Responsible Investment (SRI)1 index is used as an indicator of CSR performance. Four measures of CSR disclosure are used. Results and conclusion: The study tests both CSR performance and CSR disclosure against both real earnings management (REM) and accrual-based earnings management (AEM). CSR performance and earnings management: Companies with better CSR performance were more likely to engage in EM through income increasing discretionary accruals. This suggests that managers who inflate earnings may engage in CSR activities to avoid unwanted scrutiny from stakeholders. Companies with better CSR performance were less likely to engage in REM, suggesting that managers with better CSR performance regard the management of earnings through accruals that reverse in the next period less incriminating than managing earnings through actual company resources. CSR disclosure and earnings management: Companies that integrated their CSR disclosures more into their annual report engaged less in income decreasing discretionary accruals, suggesting that managers with incentives to make more CSR disclosures to reduce information asymmetry will also be less inclined to manage earnings.

The purpose of this study is to explore the role of corporate social responsibility (CSR) in the management of SMEs. Corporate Social Responsibility is an important factor of businesses and involves social and environmental issues. It deals with the internal and external environment of enterprises and aims at their continuous development. It helps the companies to be accountable to shareholders and stakeholders. The aim of the paper is to exprore corporate social responsibility in business management, the specific features of this, the approach of the organization of the parties involved. The methodology used is based on bibliographic research, text analysis and the linking of findings from research to the current state of affairs. The expected results of the study are focused on the necessity of the SMEs to take initiatives to improve the quality of corporate social responsibility and the importance of changes in these organizational structures in order to gain more responsibility and effectiveness. Also, it seems that there is a positive correlation between CSR and performance. The above findings can help to inform the public about the current situation of small and medium-sized enterprises and identify the causes of delays in the development of better corporate social responsibility in the business environment.