Abstract
The purpose of this research is to determine the type of earnings management in Canadian firms. To do this, we studied the effect of discretionary accruals, proxy of earnings management, on the future profitability of the firm. In addition, we studied the effect of entrenchment and governance mechanisms namely the board independence, the audit committee existence and the audit quality on the type of earnings management. Our study was based on a sample of 113 Canadian firms listed on the Toronto stock exchange. Using multiple regressions, we found that the type of earnings management chosen by Canadian firms result tends towards efficiency, and that the effect of discretionary accruals on future profitability is moderated only by the manager's entrenchment and the audit quality.
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 callMore From: International Journal of Behavioural Accounting and Finance
Disclaimer: 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.
