Do Public Enterprises Manage Earnings? Evidence from Germany

Earnings management is among the most extensively analysed topics of empirical accounting research since the 1980s. However, studies have focussed on commercial enterprises only and not yet properly covered the case of public enterprises. We try to close this research gap by modelling the management...

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Bibliographic Details
Published inCurrent Trends in Public Sector Research: Proceedings of the 24th International Conference pp. 106 - 114
Main Authors Sidki, Marcus, Boll, David, Müller, Harry
Format Book Chapter
LanguageEnglish
Published Czech Republic Masarykova univerzita nakladatelství 2020
Masaryk University Press
Subjects
Accounting - Business Administration
Business Economy
Management
Earnings management
empirical accounting research
public enterprises
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Summary:Earnings management is among the most extensively analysed topics of empirical accounting research since the 1980s. However, studies have focussed on commercial enterprises only and not yet properly covered the case of public enterprises. We try to close this research gap by modelling the management incentives to manipulate earnings with reference to institutional economic theory. Based on that, we analyse the financial reporting of 14,800 German public companies over a period of 16 years. The data shows clear signs of earnings management for those public enterprises that are more independently run, rather detached from traditional municipal activities, and operating in a more competitive market environment, which is in line with our theoretical model.
ISBN:9788021096462
8021096462