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Title: Corporate integrity and accrual earnings management
Authors: Lee, Hsien-li 
Dr. LEE Hua 
Kung, Cheng-Ju 
Issue Date: 2022
Source: Journal of Accounting, Finance & Management Strategy, 2022, Vol. 17(2), pp. 1-31.
Journal: Journal of Accounting, Finance & Management Strategy 
Abstract: This paper examines the relationship between corporate integrity and accrual earnings management. We explore whether managers of firms that publicize corporate culture of integrity engage in accrual earnings management. Using hand-collected data on a sample of publicly listed firms in Taiwan and considering the endogeneity of the choice of corporate integrity, the results from two-stage Heckman (1979) estimation procedures show that firms publicizing information about integrity activities in the corporate social responsibility report or on their own webpages have a smaller magnitude of discretionary accruals. The evidence is consistent with firms that publicize the culture of integrity engaging in less aggressive earnings management using accruals. Building on prior research, this paper contributes to address the issue of earnings quality in the context of corporate integrity. All else being equal, the evidence suggests the decision usefulness of financial statements in terms of earnings quality of socially responsible firms. The evidence provides policy implication for the need to regulate corporate integrity practices in accordance with the Ethical Corporate Management Best Practice Principles in Taiwan. [ABSTRACT FROM AUTHOR] Copyright of Journal of Accounting, Finance & Management Strategy is the property of Performance Management Academy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.
Type: Peer Reviewed Journal Article
ISSN: 1556-5793
Appears in Collections:Accounting - Publication

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