Perceptions of earnings management: The effects of national culture

Geiger, M and O'Connell, B 2006, 'Perceptions of earnings management: The effects of national culture', Advances in International Accounting, vol. 19, pp. 175-199.

Document type: Journal Article
Collection: Journal Articles

Title Perceptions of earnings management: The effects of national culture
Author(s) Geiger, M
O'Connell, B
Year 2006
Journal name Advances in International Accounting
Volume number 19
Start page 175
End page 199
Total pages 25
Publisher J A I Press Inc.
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.
DOI - identifier 10.1016/S0897-3660(06)19007-8
ISSN 0897-3660
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