Languages and earnings management

• 成果类型: Article
• 署名作者: Kim, Jaehyeon; Kim, Yongtae; Zhou, Jian
• 署名单位: Deakin University; Santa Clara University; University of Hawaii System; University of Hawaii Manoa
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2017.04.001
• 发表日期: 2017
• 关键词: consequences; QUALITY; FIRMS; real

摘要

We predict that managers of firms in countries where languages do not require speakers to grammatically mark future events perceive future consequences of earnings management to be more imminent, and therefore they are less likely to engage in earnings management. Using data from 38 countries, we find that accrual-based earnings management and real earnings management are less prevalent where there is weaker time disassociation in the language. Our study is the first to examine the relation between the grammatical structure of languages and financial reporting characteristics, and it extends the literature on the effect of informal institutions on corporate actions. (C) 2017 Elsevier B.V. All rights reserved.