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Truthfulness in Accounting: How to Discriminate Accounting Manipulators from Non-manipulators

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Abstract

Accountants preparing information are in a position to manipulate the view of economic reality presented in such information to interested parties. These manipulations can be regarded as morally reprehensible because they are not fair to users, they involve in an unjust exercise of power, and they tend to weaken the authority of accounting regulators. This paper develops a model for detecting earnings manipulators using financial statements’ ratios in a sample of Spanish listed companies. Our results provide evidence that accounting data can be extremely useful in detecting manipulators. This approach can be used by a large category of users of accounting information among which we can cite stock exchange supervisors or investing professionals.

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Notes

  1. Since there are 9 independent variables, the total number of possible models is 512.

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Authors and Affiliations

  1. Babes-Bolyai University, Cluj-Napoca, Romania

    Alina Beattrice Vladu & Dan Dacian Cuzdriorean

  2. Universitat Pompeu Fabra, Barcelona, Spain

    Oriol Amat

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  1. Alina Beattrice Vladu
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  2. Oriol Amat
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Vladu, A.B., Amat, O. & Cuzdriorean, D.D. Truthfulness in Accounting: How to Discriminate Accounting Manipulators from Non-manipulators. J Bus Ethics 140, 633–648 (2017). https://doi.org/10.1007/s10551-016-3048-3

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