Debt as a motivation for earnings management by Portuguese municipalities?

Abstract

IMPACT This article focuses on earnings management in local government. Specifically, it examines whether politicians in Portuguese municipalities engage in earnings management due to indebtedness. The findings are critical for citizens/voters, as it enables them to evaluate potential inefficiencies in the management of public resources. The author recommends that standard setters make improvements in accounting standards to minimize the opportunity for accounting discretion at the local level.