alexa Detecting Earning Management and Earning Manipulation i
ISSN: 2472-114X

International Journal of Accounting Research
Open Access

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Research Article

Detecting Earning Management and Earning Manipulation in BRIC Countries; a Panel Data Analysis for Post Global Financial Crisis Period

Ahmed Shahzad*

School of accounting and finance, The University of Lahore, Lahore City Campus, Lahore, Pakistan

*Corresponding Author:
Shahzad A
School of accounting and finance
The University of Lahore
Lahore City Campus
47/C3; Gulberg III-Lahore, Pakistan
Tel: 9203214054320
E-mail: [email protected]

Received Date: May 02, 2016; Accepted Date: June 09, 2016; Published Date: June 14, 2016

Citation: Shahzad A (2016) Detecting Earning Management and Earning Manipulation in BRIC Countries; a Panel Data Analysis for Post Global Financial Crisis Period. Int J Account Res 4:134. doi:10.4172/ijar.1000134

Copyright: © 2016 Shahzad A. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.



The financial statement tells us a story, on this how much we can trust on it. This issue represents Earning Quality, covers two things one is earning management and second is earning manipulation. The objective of this study is to measurement the earning quality in BRIC countries; companies to what extent represents financial statements are trusted worthy for their stakeholders. In this study, the discretionary accruals are used as a proxy of earning manipulation and nondiscretionary accrual serves as a proxy of earning management. Data collection is taken from the BRIC countries companies’ annual reports. Modified Jones model (cross-sectional) is applied to estimate the earning management and earning manipulation for each country. The author finds strong evidence about BRIC countries involve in earning management and earning manipulation. In Case of Russia, model could not be able to detect the significant earning manipulation; one reason behind this issue is that Russian company’s data collection are very limited and do not follow the IASB or GAAP rather they follow own country GAAPs. This research would be helpful for the auditor, the user of financial statement and accounting standard bodies like IASB or GAAPs that they should reduce the role of discretionary accruals. The authors extend previously modified Jones model and apply it to BRIC countries. The authors also extend previous work by determining the characteristics of firms which manage their earnings.


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