Written by Marc Oliveras

Article 1, Volume 3 Issue 2

Accounting ratio-based predictions: an analysis of the relationship between indicators of financial health and those of accounting manipulation

Joan Llobet-Dalmases, Dolors Plana-Erta and Àngels Fitó-Bertran

DOI: 10.26595/eamr.2014.3.2.1

Abstract


Against a backdrop of global accounting harmonization, financial information is required to be useful and trustworthy for investors and other users. This study contributes to establishing whether there is a relationship between the Z-score model for predicting financial distress and the Z Vladu model for predicting earnings manipulation. Both models discriminate between companies using financial statement ratios.

Extracting data from the Sistema de Análisis de Balances Ibéricos (Iberian Accounts Analysis System, or SABI) database for medium-sized and large Spanish companies for the period 2005 to 2015, both summary indicators have been calculated and descriptive and bivariate analyses have been performed.

The results show that there is a relationship between both indicators, albeit a weak one.

Keywords


  • Financial distress
  • Z-score
  • Earnings manipulation
  • Earnings management
  • Earnings quality
  • Spanish firms

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Written by Marc Oliveras

Article 1, Volume 2 Issue 1:

Is financial reporting quality related to corporate social responsability practices? Evidence from family firms

Jennifer Martinez-Ferrero, Lázaro Rodriguez-Ariza and Beatriz Cuadrado-Ballesteros

DOI: 10.26595/eamr.2014.2.1.1

Abstract


The aim of this research is to highlight the relationship between financial reporting quality and corporate social responsibility (CSR) on the family firm sphere. Using a database of 1275 companies for the period 2002–2010 and the GMM estimator of Arellano and Bond (1991) for panel data, our results show that those companies that report high-quality financial statements promote more CSR practices. However, this relationship is weaker in family firms which support the existence of an entrenchment effect that associates greater family ownership with poor-quality information. We argue that family firms differ from non-family regarding the effect of financial reporting quality on the level of CSR practices.

Keywords


  • Financial reporting quality (FRQ)
  • Earnings quality
  • Corporate social responsibility (CSR)
  • Family business

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