JONES, DECHOW AND KASZNIK MODELS SIGNIFICANCE IN THE ROMANIAN ECONOMIC ENVIRONMENT

Abstract

This study intends to be a first step into an attempt of measuring the earningsmanagement using an econometric model valid for the Romanian specificities by trying to establishthe level of significance of three acknowledged econometric models: Jones (1991), Dechow et al.(1995) and Kasznik (1999) on Romanian economic environment.Given the above mentioned premises, the study was conducted using the Romanian listedcompanies (active on the Bucharest Stock Exchange) selected by a main criteria: discrepancybetween reported cash flow and reported net income. Our analyses lead us to the conclusionrelated to the above mentioned issues that Jones model was found to be significant for Romanianeconomic environment in terms of applicability unlike Dechow and Kasznik models, thus it may befurther developed and applied to an extended database.earnings management, manipulation, cash flow