The relationship between earnings management and corporate social responsibility and their effects on corporate performance, cost of capital and reputation

[ES] Para recuperar la pérdida de confianza experimentada por inversores, clientes , proveedores, entidades financieras, comunidad y stakeholders en general, como consecuencia de los continuos escándalos contables y financieros acaecidos en los últimos años (prácticas de manipulación contable, MC), se han reforzado las exigencias legales y los mecanismos de monitorización que garanticen la calidad de la información financiera emitida por las empresas. Asimismo, las compañías han comenzado a adoptar patrones de comportamiento sostenible, la denominada Responsabilidad Social Corporativa (RSC). No obstante, debido al espectacular crecimiento de tales actuaciones sostenibles, surge un debate y escepticismo en torno al verdadero fin perseguido con tales prácticas. Por ello, el objetivo de esta investigación se centra en analizar la posible relación bidireccional entre MC y RSC y la existencia de una estrategia de atrincheramiento basada en la RSC como prácticas discrecionales, así como en determinar las consecuencias económicas, financieras y de mercado de tal atrincheramiento directivo. La muestra a partir de la cual hemos obtenido evidencia empírica ha sido compuesta por 1.960 empresas internacionales, cotizadas y no financieras para el periodo 2002-2010, pertenecientes a 26 países. La evidencia empírica pone de manifiesto la existencia de una relación negativa y bidireccional entre las prácticas de RSC y las de MC. Sin embargo, debido a la división de la muestra en empresas sostenibles y no sostenibles, una estrategia de atrincheramiento basada en la RSC como mecanismo que enmascara una gestión de resultados previa puede existir. Concretamente, este atrincheramiento es parcialmente identificado por el mercado. Únicamente cuando se consideran entornos caracterizados por una fuerte orientación al stakeholder, entornos donde el compromiso hacia la sostenibilidad es mayor, dicho atrincheramiento es identificado y penalizado por los inversores con un menor rendimiento financiero, un mayor coste de capital y una peor reputación e imagen corporativa

Corporate social responsibility as a strategic shield against costs of earnings management practices

We highlight how Corporate Social Responsibility (CSR) can be strategically used against the negative perception from earnings management (EM). Using international data, we analyse the effect of CSR and EM on the cost of capital and corporate reputation. Results confirm that CSR strategy is positively valued by investors and other stakeholders. Contrary to EM, CSR has a positive effect on corporate reputation and lowers the cost of capital. In addition, we also find that the favorable effect of CSR on cost of capital is consistently more intense in firms that show signs of EM indicating that the market does not identify when CSR practices are used as a strategy to mask EM. We also demonstrate how institutional factors influence the above relationship

Juego de roles para la adquisición de competencias en contabilidad

Memoria ID-031. Ayudas de la Universidad de Salamanca para la innovación docente, curso 2021-2022

Implantación de metodologías docentes en materia de contabilidad dentro del marco del Espacio Europeo de Educación Superior

Memoria ID-013. Ayudas de la Universidad de Salamanca para la innovación docente, curso 2013-2014

THE LINK BETWEEN EARNINGS MANAGEMENT AND DIGITAL PATTERN / O elo entre gerenciamento de resultado e padrão digital

According to Dechow and Dichev (2002) and Lin and Wu (2014), a high degree of earnings management (EM) is associated with a poor quality of information. In this sense, it is possible to assume that the financial data of companies that manage earnings can present different patterns from those with low degree of EM. The aim of this exploratory study is to test whether a financial data set (operating expenses) of companies with high degree of EM presents bias. For this analysis, we used the model of Kothari and the modified model of Jones (“Dechow model” hereafter) to estimate the degree of EM, and we used the logarithmic distribution of data predicted by the Benford’s Law to detect abnormal patterns of digits in number sets. The sample was composed of 845 international listed non-financial companies for the year 2010. To analyze the discrepancies between the actual and expected frequencies of the significant-digit, two statistics were calculated: Z-test and Pearson’s chi-square test. The results show that, with a confidence level of 90%, the companies with a high degree of EM according to the Kothari model presented similar distribution to that one predicted by the Benford’s Law, suggesting that, in a preliminary analysis, their financial data are free from bias. On the other hand, the data set of the organizations that manage earnings according to the Dechow model presented abnormal patterns. The Benford´s Law has been implemented to successfully detect manipulated data. These results offer insights into the interactions between EM and patterns of financial data, and stimulate new comparative studies about the accuracy of models to estimate EM.Keywords: Earnings management (EM). Financial Reporting Quality (FRQ). Benford’s Law

Women on boards and efficiency in a business‐orientated environment

This study proposes a new research approach to examining the relationship between board diversity in terms of gender differences and corporate performance, measured by technical efficiency. Moreover, this paper also examines the moderating role that institutional factors exert on this relationship through the cultural dimensions of the country of origin. The research questions are examined using an international sample of 2185 listed firms from 2006 to 2015, applying several truncated regression models for panel data and employing data envelopment analysis to examine efficiency as a measure of performance. This paper provides support for the assertion that female directors decrease the firm's technical efficiency; however, in more economically orientated cultures, institutional context exerts a moderating effect on the latter. The female directors of companies located in countries with higher economically orientated values adopt male stereotypes and have a significant and positive interest in improving efficiency

Women on boards and efficiency in a business‐orientated environment

This study proposes a new research approach to examining the relationship between board diversity in terms of gender differences and corporate performance, measured by technical efficiency. Moreover, this paper also examines the moderating role that institutional factors exert on this relationship through the cultural dimensions of the country of origin. The research questions are examined using an international sample of 2185 listed firms from 2006 to 2015, applying several truncated regression models for panel data and employing data envelopment analysis to examine efficiency as a measure of performance. This paper provides support for the assertion that female directors decrease the firm's technical efficiency; however, in more economically orientated cultures, institutional context exerts a moderating effect on the latter. The female directors of companies located in countries with higher economically orientated values adopt male stereotypes and have a significant and positive interest in improving efficiency

Breakout en contabilidad: el uso del juego en la enseñanza universitaria

Memoria ID-023 Ayudas de la Universidad de Salamanca para la innovación docente, curso 2020-2021

Board Independence And Firm Performance: The Moderating Effect Of Institutional Context

This study proposes a new research approach to examine the relationship between board independence and corporate performance, measured by technical efficiency. Moreover, this paper examines the moderating role that institutional factors exert on this relationship through the legal system—the content of law and its enforcement. The research questions are examined using an international sample of 2185 firms from 2006 to 2015, applying truncated regression models for panel data and employing data envelopment analysis to examine efficiency as a measure of performance. This paper supports that board independence increases the firm's technical efficiency. Even more, greater legal and judicial protection exerts a positive moderating effect on the previous relationship by protecting private benefits for insiders, among other aspects. Thus, the positive impact of independent directors on efficiency is greater when firms operate in countries with a greater extent of law and enforcement. Our findings include endogeneity checks using instrumental variables

Managerial entrenchment, corporate social responsibility, and earnings management

Many studies have examined the direct relationship between the two corporate practices: corporate social responsibility (CSR) and earnings management (EM); however, the results remain heterogeneous. To achieve the consensus, this study builds upon the classical agency theory and examines the role of managerial entrenchment in creating organizational facades related to CSR and EM. More specifically, it examines the relationship between CSR performance and EM in the presence of managerial entrenchment and the direct effect of managerial entrenchment on CSR decoupling. In doing so, this article provides evidence of a previously underappreciated yet fundamentally important aspect, that is, managerial entrenchment, that may significantly affect the quality of earnings as well as the level of alignment between CSR disclosure and performance. Our analyses of longitudinal data of an international sample for the period of 2007-2016 supports that managerial entrenchment significantly moderates the relationship between CSR performance and EM. Furthermore, our study reveals that entrenched managers decouple CSR disclosure and performance