Title: Earnings management, earnings quality, and culture: cross-country studies

Authors: Anna Purwaningsih; Indra Wijaya Kusuma; Zuni Barokah

Addresses: Universitas Atma Jaya Yogyakarta, Jalan Babarsari No. 43, Yogyakarta, 55281, Indonesia; Universitas Gadjah Mada, Jalan Nusantara, Kampus UGM, Bulaksumur, Yogyakarta, 55281, Indonesia ' Universitas Gadjah Mada, Jalan Nusantara, Kampus UGM, Bulaksumur, Yogyakarta, 55281, Indonesia ' Universitas Gadjah Mada, Jalan Nusantara, Kampus UGM, Bulaksumur, Yogyakarta, 55281, Indonesia

Abstract: This study examines the association of accrual and real earnings management with earnings quality. The research sample comprised companies listed on six stock exchanges. Data analysis was conducted using a regression test and a t-test. The results indicate that both accrual and real earnings management are significantly associated with earnings quality. When the model includes cultural values, accrual, and real earnings management are associated with earnings quality in countries with low individualism and high uncertainty avoidance. Compared with real earnings management, accrual earnings management has a stronger association with earnings quality.

Keywords: real earnings management; REM; accrual earnings management; AEM; earnings quality; individualism; uncertainty avoidance.

DOI: 10.1504/IJEPEE.2020.109579

International Journal of Economic Policy in Emerging Economies, 2020 Vol.13 No.4, pp.422 - 430

Received: 21 Aug 2019
Accepted: 02 Dec 2019
Published online: 15 Sep 2020 *

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