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Financial Crises and Earnings Management Behavior

Arguments and Evidence Against Causality

  • Bruno Maria Franceschetti

Part of the Contributions to Management Science book series (MANAGEMENT SC.)

Table of contents

  1. Front Matter
    Pages i-x
  2. Bruno Maria Franceschetti
    Pages 1-13
  3. Bruno Maria Franceschetti
    Pages 15-74
  4. Bruno Maria Franceschetti
    Pages 75-102
  5. Bruno Maria Franceschetti
    Pages 119-161

About this book

Introduction

This book approaches the question of the relation between financial crises and earnings management from two philosophical perspectives: positivism and critical realism. The results obtained using the positivist approach indicate that financial crises tend to have no consistent effect on earnings quality since managers’ earnings behavior does not differ from the pre-crisis to the crisis period. The author accordingly argues against the existence of a causal law based on a constant conjunction model (i.e., whenever a financial crisis happens, earnings management occurs) and concludes that financial crises cannot be seen as the cause of earnings management. The critical realism perspective, on the other hand, casts light on managers’ reasons for acting like an earnings manager; in conjunction with the more traditional positivist approach, it assists in refuting the idea of financial crises as a generative mechanism for earnings management. The author concludes by exploring other structures at work that might be responsible for earnings management. This book will be of interest to both academics and a wide range of professionals.

Keywords

Earnings management Financial crisis Earnings manipulation Earnings quality Data manipulation Financial fraud Earnings behavior Creative accounting Aggressive accounting Income smoothing Critical realism approach

Authors and affiliations

  • Bruno Maria Franceschetti
    • 1
  1. 1.Department of Economics and LawUniversity of MacerataMacerataItaly

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-319-54121-1
  • Copyright Information Springer International Publishing AG 2018
  • Publisher Name Springer, Cham
  • eBook Packages Business and Management
  • Print ISBN 978-3-319-54120-4
  • Online ISBN 978-3-319-54121-1
  • Series Print ISSN 1431-1941
  • Series Online ISSN 2197-716X
  • Buy this book on publisher's site