Version 1
: Received: 7 June 2021 / Approved: 8 June 2021 / Online: 8 June 2021 (09:33:10 CEST)
How to cite:
Nechita, E. Analysis on Sustainability Reporting and Earnings Management Practices. Evidence from an Emerging Economy. Preprints2021, 2021060203. https://doi.org/10.20944/preprints202106.0203.v1
Nechita, E. Analysis on Sustainability Reporting and Earnings Management Practices. Evidence from an Emerging Economy. Preprints 2021, 2021060203. https://doi.org/10.20944/preprints202106.0203.v1
Nechita, E. Analysis on Sustainability Reporting and Earnings Management Practices. Evidence from an Emerging Economy. Preprints2021, 2021060203. https://doi.org/10.20944/preprints202106.0203.v1
APA Style
Nechita, E. (2021). Analysis on Sustainability Reporting and Earnings Management Practices. Evidence from an Emerging Economy. Preprints. https://doi.org/10.20944/preprints202106.0203.v1
Chicago/Turabian Style
Nechita, E. 2021 "Analysis on Sustainability Reporting and Earnings Management Practices. Evidence from an Emerging Economy" Preprints. https://doi.org/10.20944/preprints202106.0203.v1
Abstract
In light of the worldwide spreading requirements related to the disclosure of non-financial information, which are aligning to the Sustainable Development Goals (SDGs) developed by the United Nations (UN) in 2015, the study aims to analyse the influence of sustainability and other non-financial reporting on companies’ engagement in earnings management practices, through a pre-post adoption of European Directive 2014/95/EU comparative analysis for firms listed on the Bucharest Stock Exchange (BSE) in the period 2015-2019. To conduct the investigation, the research involves the assessment and analysis of three earnings management metrics resulted by running multiple linear regression models on a sample of 31 companies listed on BSE. Research findings emphasise a decrease in the use of income smoothing practices by sampled companies in the post-adoption period 2017-2019, compared to the period preceding the implementation of the EU directive related to mandatory disclosure of non-financial information, 2015-2016. Thus, firms characterised by a higher transparency in terms of sustainability reporting are less inclined to engage in earnings management practices. This research complements the literature in the field of sustainability reporting and earnings management, providing empirical evidence on the significance and impact of publishing non-financial information.
Keywords
sustainability reporting; earnings management; European Directive 2014/95/EU; non-financial reporting; sustainable development goals (SDGs); empirical research
Subject
Business, Economics and Management, Accounting and Taxation
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.