Abstract
During the 2014 APEC Conference, there was a long presence of blue sky (APEC Blue) after a long-time occurrence of hazy weather in Beijing, China, which prompted the public’s attention to heavy-polluting enterprises to reach a new peak. Will the public’s negative concern about the incident will affect the operation of heavy-polluting enterprises? In this paper, we analyzed the influence of the haze-related exogenous events before and after the “APEC Blue” on earnings management of heavy-polluting enterprises from a new perspective of negative social attention. We carry out research from three perspectives for further research, which involve the growth in the demand for accounting information disclosure, the increase of consumers’ low-carbon consciousness and differences in the amount of attention on enterprises with different properties and scales. Results indicate that heavy-polluting enterprises have stronger preference for downward earnings management, especially in those enterprises that are large in scale, non-state owned, or have a direct relationship with consumers.
Highlights
Haze, as a threat to human health, has been a hot topic that greatly raises public concern after the serious fine particulate matter (PM2.5) event at the end of October 2011 in China
Heavy-polluting enterprises that are directly related with consumers have a strong motivation to adopt downward earnings management and create a corporate image of “low profits but quick turnover”, aiming to avoid large-scale consumer boycott against their products because of their heavy pollution
Based on the “APEC Blue” event in 2014, effects of social pressure caused by negative social attention on accounting information disclosure of heavy-polluting enterprises are discussed in this paper with the use of empirical data
Summary
As a threat to human health, has been a hot topic that greatly raises public concern after the serious fine particulate matter (PM2.5) event at the end of October 2011 in China. It is worth mentioning that accounting information is one of the important means through which the public can evaluate whether a heavy-polluting enterprise is “the heartless rich” and failed to commit to the social and environmental responsibilities. The public is concerned about whether heavy-polluting enterprises are “the heartless rich” and whether they have fulfilled social responsibilities in environmental protection practically, while scholars pay more and more attention to the authenticity of the disclosed information. Liu et al [3] discussed the influence of haze-induced political cost on earnings management of heavy-polluting enterprises through the exogenous PM2.5 event, and found that the experimental groups adopted downward earnings management measures after the event to avoid social and government attention
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
