In an increasingly complex business environment, earnings quality is influenced not only by operational performance but also by various internal and external factors of a company. This study aims to analyze the effect of accrual earnings management, firm size, and audit quality on earnings quality in manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the period of 2021 to 2023. Earnings quality is an important indicator in evaluating a company's financial performance and serves as a basis for investors' decision-making. This research employs a quantitative approach using multiple linear regression analysis. The sample was selected using purposive sampling, with secondary data derived from companies’ annual financial reports. Based on agency theory, there is a conflict of interest between managers and owners, which encourages managers to maximize earnings quality by utilizing various internal and external factors. Accrual earnings management, audit quality, profitability and firm size serve as external monitoring mechanisms to mitigate conflicts between managers and owners. The results indicate that accrual earnings management has a positive and significant effect on earnings quality. However, firm size and audit quality do not have a significant effect on earnings quality. Nevertheless, simultaneously, all three independent variables are proven to have a significant effect on earnings quality. These findings suggest that accrual management practices play a crucial role in enhancing the quality of earnings information, while firm size and audit quality have not yet made a meaningful contribution in this context. This study has implications for companies to adopt greater transparency in financial reporting practices, and for investors to consider internal factors affecting earnings quality. The results are also expected to serve as an academic reference for future research in the field of financial accounting.

Purpose This study reviews research on impression management (IM) in external corporate reporting to synthesise established findings and identify promising directions for future research. The scope includes IM in narratives and visual elements in financial, integrated, and sustainability reporting. Design/methodology/approach Using a mixed-methods research synthesis, the study reviews 92 articles published between 1981 and 2025, selected through a rigorous research protocol. The synthesis incorporates conceptual and empirical studies employing quantitative and qualitative approaches. Findings This study documents the pervasive use of IM practices across financial and sustainability reporting, including selective narratives, visual distortions, and obfuscation. It highlights a growing focus on sustainability reporting and identifies links between IM and other opportunistic practices such as earnings management. The effects of IM on stakeholders remain relatively underexplored. Research limitations/implications This review outlines the current state of IM studies and identifies promising avenues for future research related to the object of study, research methods, types of reporting, and data. It encourages greater attention to under-researched IM strategies, the effects of IM on stakeholders, cross-country analyses, and the use of methods such as ethnography and field studies. Practical implications Regulators, users, and firms may benefit from a consolidated synthesis of evidence on IM, enhancing understanding of opportunistic disclosures and their implications for transparency and credibility. Originality/value This study extends prior literature reviews by covering a broader scope of techniques, reporting domains, and a wider timeframe (1981–2025).

هدفت الدراسة إلى تحديد أثر مسؤولية ومهارة التحقق للمدقق الخارجي في اكتشاف ممارسات إدارة الأرباح من وجهة نظر المدقق الخارجي لدى مكاتب وشركات التدقيق في الجمهورية اليمنية، ولتحقيق هدف هذه الدراسة تم الاعتماد على (الاستبانة) أداة لجمع البيانات، حيث تم توزيع (287) استبانة بشكل مباشر على عينة عشوائية من المدققين الخارجيين ومساعديهم بأمانة العاصمة صنعاء، وكانت الاستبانات الصالحة للتحليل الإحصائي (278) استبانة، وقد أظهرت النتائج وجود أثر إيجابي للمتغيرين مسؤولية التحقق, ومهارة التحقق للمدقق الخارجي في اكتشاف ممارسات إدارة الأرباح، كما أظهرت النتائج أن مصدر الأثر الإيجابي لمسؤولية التحقق للمدقق الخارجي في ‏اكتشاف ممارسات إدارة الأرباح جاء بسبب المسؤولية القانونية بدرجة كبيرة، يليها المسؤولية المهنية، ثم المسؤولية الأخلاقية، وأن مصدر الأثر الإيجابي لمهارة التحقق للمدقق الخارجي في ‏اكتشاف ممارسات إدارة الأرباح جاء بسبب التدريب المستمر، وأظهرت النتائج أيضا وجود أثر ذي دلالة إحصائية لبذل العناية المهنية الكافية كأحد أبعاد مهارة التحقق للمدقق الخارجي في اكتشاف ممارسات إدارة الأرباح، وفي ضوء تلك النتائج أوصت الدراسة بضرورة مراجعة السياسات المحاسبية البديلة التي بها مرونة، وتسمح بتعدد البدائل والخيارات في السياسات والتقديرات المحاسبية، كما أوصت الدراسة بضرورة الاهتمام بالتأهيل العلمي والمهني للمدققين الخارجيين، وتطوير أدائهم بشكل مستمر، وأخيراً أوصت الدراسة بضرورة تضافر جهود المنظمات المهنية والجهات المعنية بإبراز الآثار المترتبة على ممارسة عمليات إدارة الأرباح.

Mathematical Analysis to Measure Corporate Governance Reforms Impact on Earnings Management: Evidence from the Saudi Economy after Vision 2030

Tax authority independence and earnings management

AI strategy, earnings management, and corporate fraud: Evidence from listed firms in China

Disclosure strategies for management earnings forecasts: insights from the corporate life-cycle perspective

This study uses samples of Chinese A-Shares non-financial listed companies from 2007 - 2019, combined with the phased implementation of the margin trading system as a quasi-natural experiment, to study whether short-selling mechanism is affected by the rule of law and how the rule of law moderates the impact of short-selling mechanism on the earnings management of non-financial listed companies of Chinese A-share. Short selling curbs both accrual-based and real earnings management (beta=-0.012 and-0.015), and it restrains real earnings management more. The rule of law has a positive moderating effect on this governance effect, the suppression of earnings fraud is significantly higher in high rule of law (DA: -0.018,REM:-0.020) compared to low rule of law (DA: -0.006,REM:-0.007) places. Heterogeneity analysis shows that the moderating effect is more pronounced on non-state owned firms and regulated industries. From the mechanism tests, this study can see that short selling restrains earnings management by improving the information transparency and reinforcing financing constraints. The analyst coverage and institutional ownership will boost the effect. This study proposes judicial coordination, different treatment for short sale targets, and to build a 'law-short selling' risk early warning mechanism.

When climate commitment fades: exit from the Paris agreement and financial reporting quality

Purpose This paper aims to study the effects of IFRS 9 adoption and the moderating role of rule of law (RoL) on earnings volatility of banks. Design/methodology/approach The sample consists of banks from 17 G20 countries from 2016 to 2019. Pooled and fixed effect regression analyses are used to test if IFRS 9 adoption, RoL and the interaction effects between them have any significant effects on banks' earnings volatility. Additionally, the Generalised Method of Moments (GMM) was employed to address endogeneity issue and the mediating role of earnings management is examined. Findings This study offers three important findings. Firstly, the study finds that banks from high RoL countries in general have lower volatility. Secondly, there is a significant decline in earnings volatility after the adoption of IFRS 9. Finally, the study provides evidence that the relationship between IFRS 9 and earnings volatility is moderated by RoL. Practical implications The findings confirm the effectiveness of IFRS 9 in reducing earnings volatility. They also highlight the importance for countries of weaker institutional quality (low RoL) to complement with stricter accounting standards. However, improving legal or institutional frameworks alone may not be sufficient. Those frameworks must be effective in constraining opportunistic earnings manipulation to have a meaningful impact on earnings volatility. Originality/value Unlike prior studies that examined market-based volatility or examined the impact on loan loss provision, loan impairments and non-performing loans, this study offers new insights to the effect of IFRS 9 adoption and a country's quality of legal framework on banks' earnings volatility.

This study examines the impact of family ownership and corporate governance mechanisms on earnings management practices, encompassing both accrual-based earnings management (AEM) and real-activity-based earnings management (REM). The independent variables include the board of commissioners (size, independence, meeting frequency, and expertise), the board of directors (size, independence, meetings, expertise), and company characteristics (size, leverage, growth). Data were sourced from companies listed on the Indonesia Stock Exchange (IDX), utilizing annual financial reports or annual reports spanning the period from 2017 to 2023, excluding the financial and banking sectors. Analysis was performed employing multiple regression and moderation regression models. The findings of this study show that family ownership has a significant effect on both AEM and REM, while several corporate governance variables and company characteristics have varying effects. These findings have important implications for regulators, investors, and company management to strengthen the transparency and accountability of financial reporting.

من اكثر الممارسات انتشارا التي تؤثر على جودة التقارير المالية للشركة هي إدارة الأرباح ,إذ تؤثر إدارة الأرباح على عملية اظهار الأداء الحقيقي للشركات من خلال استغلال المرونة في المبادئ المحاسبية GAAP))، ويعد استعمال نموذج M-score مهماً في اكتشاف ممارسات إدارة الأرباح وتم تطبيق البحث على المصارف العراقية المدرجة في سوق العراق للأوراق المالية والبالغ عددها 16مصرف لسنة 2018 توصل البحث أن عدد المصارف التي تدير أرباحها في سنة 2018 وفقا لنموذج M-score هي 9 مصارف اي تشكل56.2 % من اجمالي العينة البالغة 16 مصرف من المصارف المدرجة في سوق العراق للأوراق المالية، فإن النسبة المتبقية 43.75% لا تمارس إدارة الأرباح, فيما اوصى البحث بتوظيف النماذج الاحصائية من قبل المدققين الخارجيين للكشف عن ممارسات إدارة الأرباح فهو تقنية مفيدة ووسيلة جيدة يمكن أن تضاف إلى الاجراءات الرقابية الاخرى التي يستخدمونها في تدقيقهم لحسابات الشركات .

This analysis extends conventional focus on accrual manipulations by investigating how real earnings management (REM) interacts with political connections (PC) to influence audit pricing. Set in Vietnam's person-centric economy, the research poses two central queries: how auditors perceive the nuanced threats posed by REM, and whether the structure of political ties undermines the effectiveness of the audits. We employ a fixed-effects framework on a balanced panel of 456 publicly listed non-financial firms, covering 2015 to 2024. Our findings show that auditors price REM risk, raising the audit fee. Yet PC, being inherently relational, weakens this pricing pressure: firms with ties negotiate substantial fee concessions, which noticeably attenuate the MEM-audit fee relation. Importantly, this absorption occurs predominantly within the non-Big 4 segment, while Big 4 firms price REM independently of any concessions warranted by political ties. The divergent pricing strategies yield the paper's most novel insight, confirming that larger audit networks price substantive risk regardless of relational context, thereby highlighting a key segmentation in Vietnam’s audit market. Taken together, the data paint a two-tier Ukrainian audit market: smaller firms tinker with fees only at the margin, while the global giants charge in a more independent and phased manner, amplifying the unevenness in independence and service standards across the economy. The findings underscore that high-quality audit brands remain a resilient bulwark for investors, still acting as externally enforced governance filters even when established political ties tend to erode normal market discipline. Notably, the combination of elevated real-earnings management, a politically connected board member, and a non-Big Four audit signals three independent and serious red flags in a company's financials. For regulators, these indicators crystallise the practical hurdles of institutional oversight when the overlap of compromised governance and sub-scale auditing firms lies within the same company.

Purpose This study aims to investigate the influence of CEO demographic characteristics, specifically tenure, gender, age and education, on earnings management (EM) in European companies. In addition, it examines the moderating role of corporate social responsibility (CSR) in this relationship. Design/methodology/approach The research utilizes a sample of 2,150 firm-year observations from 215 European companies listed in the STOXX Europe 600 over the years 2011–2020. The Feasible Generalized Least Squares (FGLS) method is employed to test the developed hypotheses, offering robust and insightful analysis. Findings The analysis reveals that CEO tenure, gender and education have a significant and negative impact on EM practices in European firms. Furthermore, the study finds that effective CSR initiatives reinforce this negative relationship, suggesting that CSR amplifies the ethical influence of CEOs and contributes to reducing opportunistic financial reporting behaviors. Practical implications The findings of this study enrich the existing body of knowledge on how CEO demographics affect EM in European companies. By integrating a moderating variable approach, this research emphasizes the role of CSR, offering a fresh perspective for understanding the dynamic between top executives’ traits and EM. This could guide European firms in aligning leadership selection and CSR strategies for better corporate governance and ethical practices. Originality/value This research contributes to the “upper echelons theory” by highlighting the importance of CEO characteristics in the context of EM. It addresses a notable gap in the existing literature and stands as one of the few studies exploring the intricate interplay between CSR, CEO demographic characteristics and EM.

Purpose This study aims to examine how globalization and the adoption of International Financial Reporting Standards (IFRS) are perceived to shape accounting fraud risk in Morocco, with particular attention to the institutional conditions and organizational mechanisms through which fraudulent practices may emerge. Design/methodology/approach The study adopts a qualitative research design to explore the interplay between global pressures, IFRS adoption and accounting fraud in an emerging economy context. Data were collected through in-depth, semi-structured interviews with ten experienced accounting and finance professionals drawn from corporate, auditing and regulatory settings. Interview transcripts were analysed using a multi-stage approach: manual thematic analysis to identify core patterns and mechanisms; sentiment analysis using Python’s TextBlob library to capture emotional valence and subjectivity across themes; and latent Dirichlet allocation topic modeling to provide computational triangulation of the manually derived insights. Findings The findings suggest that globalization and IFRS adoption have increased the complexity and subtlety of fraud risk in Morocco. While IFRS is widely perceived to enhance transparency and comparability, its interpretive flexibility – combined with foreign investor pressure, limited local expertise and weak governance structures – creates opportunities for more sophisticated forms of misrepresentation. Participants also highlighted capability gaps, insufficient training and crisis conditions as amplifying fraud risk, alongside emerging concerns related to ESG-related misrepresentation. Practical implications The results suggest that effective anti-fraud responses require context-sensitive strategies that go beyond formal standard adoption. These include targeted IFRS capacity building, stronger enforcement and whistleblowing protections and governance mechanisms adapted to the realities of Moroccan firms operating under global pressures. Originality/value The study contributes by distinguishing accounting fraud from earnings management in the Moroccan IFRS context and by integrating Institutional Theory with the Fraud Diamond to explain how macro-institutional pressures interact with micro-level fraud mechanisms in an emerging economy. Methodologically, it demonstrates the value of combining qualitative analysis with computational text techniques to enhance analytical credibility in sensitive research settings.

Earnings management has become a significant element in contemporary accounting practices due to its direct relationship with the quality of financial reporting and economic decision-making processes. This practice is generally viewed as a managerial response to various economic incentives and contractual pressures inherent in corporate organizations. This article aims to examine the phenomenon of earnings management using Agency Theory and Positive Accounting Theory as the primary conceptual frameworks. The research method employed is a qualitative approach through a literature review of classical textbooks as well as relevant national and international journal articles, including recent empirical studies published within the period 2000–2025. The results of the review indicate that Agency Theory explains the emergence of earnings management practices as a consequence of conflicts of interest and information asymmetry between principals (those who delegate authority) and agents (those who receive the mandate). Meanwhile, Positive Accounting Theory explains managers’ tendencies and accounting policy choices through the bonus plan hypothesis, debt covenant hypothesis, and political cost hypothesis. In addition, recent literature findings indicate a shift in earnings management patterns from accrual-based methods toward manipulation through real business activities. This article concludes that earnings management is a rational behavior of agents that can be predicted within an economic incentive framework, although such practices have the potential to reduce the quality of accounting information. This, in turn, may diminish the relevance, reliability, and faithful representation of financial statements, thereby increasing information risk for investors. This study contributes by presenting an integrated synthesis of Agency Theory and Positive Accounting Theory in explaining earnings management practices, particularly in the context of firms operating in developing countries, such as Indonesia.

Purpose This study examines the relationship between organizational capital and earnings management, addressing whether internally embedded organizational capabilities influence financial reporting behavior. Design/methodology/approach Using a panel of publicly listed non-financial firms on the New York Stock Exchange from 2011 to 2023, the study measures organizational capital via the perpetual inventory method and analyzes its association with three forms of earnings management: accrual-based earnings management, real earnings management, and classification shifting. The analysis employs fixed-effects regressions and addresses endogeneity concerns through propensity score matching, entropy balancing, dynamic system GMM estimation, and the inclusion of additional control variables. Further analyses explore the moderating effects of product market competition, information asymmetry, and agency frictions. Findings Our results reveal a negative relationship between organizational capital and all three forms of earnings management. This association persists across alternative model specifications, estimation techniques, and organizational capital proxies. The study finds that the effect of organizational capital is stronger in highly competitive environments, for firms with lower information asymmetry, and for firms facing lower agency frictions. Originality/value This study contributes to the earnings management literature by introducing organizational capital as a governance mechanism that constrains managerial opportunism. By adopting a multidimensional earnings management framework and reconciling both the value-enhancing and potentially distortionary aspects of organizational capital, the study offers a more integrated understanding of how internal organizational capabilities shape financial reporting quality.

Competitive advantage, ownership structure, and real earnings management: the role of business group dominance in emerging markets

This study examines the relationship between Environmental, Social, and Governance (ESG) practices and earnings management, considering firm risk and board gender diversity as moderating variables. The phenomenon arises because ESG adoption in Indonesia has skyrocketed, yet its integration into risk management remains questionable. Earnings management is also widely practiced, but its impact on market perceptions of risk remains unclear. Board diversity is often promoted as a governance mechanism, but remains limited in emerging markets. The research utilizes secondary data from 194 non-financial firms listed on the Indonesia Stock Exchange as of 2023. Hypotheses are tested using multiple regression with robust standard errors. The results indicate that ESG and earnings management do not have a significant impact on firm risk, and board gender diversity does not moderate these relationships. These findings indicate that ESG disclosures remain symbolic, earnings management is not perceived as a risk signal, and board diversity has yet to provide adequate oversight. The study suggests the need for more rigorous ESG enforcement, better integration into corporate strategy, and increased female representation on boards.

The topic related to firm value has persistently become a main issue among stakeholders, as it involves various factors. This study highly contributes in the literature for examining non-ethical factors involved in company, such as tax avoidance and earnings management. Hence, this study aims to analyze the effect of tax avoidance and earnings management on firm value by considering the role of Environmental, Social, and Governance (ESG) ratings as moderating variables. Further, the data was collected from 36 companies in the energy, property & real estate, basic materials, infrastructure, and manufacturing sub-sectors listed on the Indonesia Stock Exchange (IDX) from 2021 to 2023. The moderated regression analysis was utilized to analyze the data. Surprisingly, neither tax avoidance nor earnings management has a significant impact on company value. However, ESG ratings have a significant negative impact on company value. It indicates that the stakeholders might not be considering ESG as a value-adding factor. Furthermore, ESG was unable to moderate the relationship both tax avoidance and earnings management towards company value. These findings suggest that the integration of ESG still requires broader understanding and acceptance in the Indonesian capital market, as well as the need for a strategic approach in ESG implementation to positively impact firm value.