Financial statements frauds: does their intensity have a connection with earnings management?

Elisa Raoli, M. CIABURRI, B. S. MAGNANELLI, F. FORTUNA

Risultato della ricerca: Contributo in rivistaArticolo in rivista

Abstract

This study investigates the relationship between earnings management and financial statements frauds. We examine how earnings management practices; done in the two years before the fraud, impact the likelihood of fraud occurrence. Moreover, we introduce a new measure for the fraud intensity. Using a sample of 70 fraud and 70 no-fraud firms, we find that firms committing fraud of higher intensity have managed earnings in the two years before the fraud occurrence. This paper contributes to the literature about fraud antecedents because it is the first study measuring the relationship between earnings management and the intensity of the fraud, and it can be also useful for practitioners, because using the analysis of earnings management practices, analysts can foresee and prevent financial statements frauds.
Lingua originaleEnglish
pagine (da-a)291-309
Numero di pagine19
RivistaJOURNAL OF MODERN ACCOUNTING AND AUDITING
Volume2020
DOI
Stato di pubblicazionePubblicato - 2020

Keywords

  • EARNINGS MANAGEMENT
  • financial statements frauds

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