DOI
10.1016/S0897-3660(06)19007-8
Abstract
Manipulating, or “managing,” reported earnings is a temptation faced by every accountant and corporation around the world. This study investigates whether national culture influences perceptions of the acceptability of earnings management. Participants from eight countries evaluated 13 vignettes describing various earnings management practices (Merchant & Rockness, 1994). Our results demonstrate considerable variation in perceptions across nations to the earnings management scenarios, providing strong evidence that the practice of earnings management was not perceived similarly in all countries. Using Hofstede's (1991) cultural indices, we find that the differences in aggregate perceptions across countries were not closely associated with any of the cultural dimensions examined. We do, however, find that perceptions of earnings manipulations involving the timing of operating decisions were associated with both the Power Distance Index and the Masculinity Index.
Document Type
Restricted Article: Campus only access
Publication Date
2006
Publisher Statement
Copyright © 2006, Elsevier Ltd.
DOI: https://doi.org/10.1016/S0897-3660(06)19007-8
The definitive version is available at: https://www.sciencedirect.com/science/article/pii/S0897366006190078?via%3Dihub
Recommended Citation
Marshall A. Geiger, Ilias Basioudis, Brendan T. O'Connell, Paul M. Clikeman, Elena Ochoa Labru, Kristen Witkowski, Perceptions of Earnings Management: The Effect of National Culture, Advances in International Accounting, 2006, 175-199. https://doi.org/10.1016/S0897-3660(06)19007-8