Languages and earnings management

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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.
Publisher
ELSEVIER SCIENCE BV
Issue Date
2017-04
Language
English
Article Type
Article
Keywords

CONSEQUENCES; RESTATEMENTS; MANIPULATION; ACCRUALS; QUALITY; FINANCE; FIRMS; REAL

Citation

JOURNAL OF ACCOUNTING & ECONOMICS, v.63, no.2-3, pp.288 - 306

ISSN
0165-4101
DOI
10.1016/j.jacceco.2017.04.001
URI
http://hdl.handle.net/10203/244343
Appears in Collection
MT-Journal Papers(저널논문)
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