Exploring the impact of corporate social responsibility on real earning management and discretionary accruals
Corporate social responsibility (CSR) and earning management have become important to firm’s operation. Previous researches use of discretionary accruals (DA) as a proxy variable for earnings management can easily result in errors in empirical analysis. Thus, this study uses the CSR index proposed b...
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Published in | Corporate social-responsibility and environmental management Vol. 28; no. 1; pp. 333 - 351 |
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Main Authors | , |
Format | Journal Article |
Language | English |
Published |
Chichester, UK
John Wiley & Sons, Inc
01.01.2021
Wiley Periodicals Inc |
Subjects | |
Online Access | Get full text |
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Summary: | Corporate social responsibility (CSR) and earning management have become important to firm’s operation. Previous researches use of discretionary accruals (DA) as a proxy variable for earnings management can easily result in errors in empirical analysis. Thus, this study uses the CSR index proposed by Chen et al. 2013. Journal of American Business Review, 2, 181–188, discretional accrual and real earning management to examine the association with CSR, earning management, and firm value. The empirical results find that the firm engages CSR not only to increase more information transparency of CSR and creating interaction with stakeholders but also to reduce earning management phenomenon. When firm has lower CSR performance, it has prone to earning management. In addition, CSR performance can enhance firm value, but the firm engage CSR to cover up and shift attention away from earnings manipulation by managers, it would decrease firm value. |
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Bibliography: | Funding information This study was funded by Ministry of Science and Technology (Taiwan) (MOST102‐2410‐H‐327‐002‐MY2). |
ISSN: | 1535-3958 1535-3966 |
DOI: | 10.1002/csr.2052 |