The effect of the COVID-19 pandemic on accrual-based earnings management: Evidence from four most affected European countries.

Alpaslan Ya��ar, Neriman Yal����n
Author Information
  1. Alpaslan Ya��ar: Department of Business, Adana Alparslan T��rke�� Science and Technology University, 01250, Adana, Turkiye.
  2. Neriman Yal����n: Department of Business, Adana Alparslan T��rke�� Science and Technology University, 01250, Adana, Turkiye.

Abstract

This study aims to investigate the effect of the COVID-19 pandemic on accrual-based earnings management (EM) based upon a sampling of 938 listed firms from four selected European countries (United Kingdom, Italy, Spain, and T��rkiye) during 2016-2020. We find that firms engage more in accrual-based EM through income-increasing and income-decreasing accruals in the year of the COVID-19 pandemic relative to the period before the pandemic. These findings imply that financial reporting reliability and usefulness decreased in the period of the pandemic. Our results are robust to some sensitivity checks.

Keywords

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Word Cloud

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