Abstract
This study examines the impact of legal origin differences on accrual and real earnings management behaviors for 14 international financial reporting standards (IFRS) countries. Specifically, a cross-country analysis determines the effects of enforcement intensity and IFRS adoption on earnings management (EM) types, depending on code or common law origins. The results indicate that legal origin directly affects EM behaviors, whereas enforcement intensity and IFRS result in different accrual earnings management (AEM) and real earnings management (REM) behaviors depending on the different legal origins. In particular, the findings also suggest that an increase in enforcement strength may not produce similar EM results for each legal tradition, specifically for the expected shift from AEM to REM as recent studies have proposed. This study also offers evidence that IFRS represent a constraint on AEM in code law origin countries, and it highlights a constraint on REM only for common law countries when the enforcement intensity increases.
Sign-in/Register to access full text options 
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.
