We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Macroeconomic uncertainty and earnings management: evidence from commodity firms.
- Authors
Rigamonti, Alessandro Paolo; Greco, Giulio; Pierotti, Mariarita; Capocchi, Alessandro
- Abstract
This study examines the relationship between macroeconomic uncertainty and earnings management, using quarterly data of US commodity firms from the period 1990–2019. The findings show that oil and iron firms use both accruals and real activities to decrease earnings in quarters with high basis risk. Earnings management is economically significant. Further investigation provides fine-grained evidence that specific types of uncertainty (economic policy, climate policy, geopolitical) have varying effects on earnings management. The study also provides evidence that earnings management is aimed at giving investors useful information about the firms' performance during uncertain times. The study contributes to previous research on uncertainty and earnings management. It also informs market participants about the financial reporting quality of commodity firms, and has practical implications for financial reporting regulation in extracting industries.
- Subjects
EARNINGS management; ACCRUAL basis accounting; ECONOMIC policy; INVESTMENT information; GOVERNMENT policy on climate change; FINANCIAL statements; EARNINGS announcements
- Publication
Review of Quantitative Finance & Accounting, 2024, Vol 62, Issue 4, p1615
- ISSN
0924-865X
- Publication type
Article
- DOI
10.1007/s11156-024-01246-8