Earnings management and the financial crisis: A quantile regression analysis.
This thesis examines the influence of the financial crisis of 2008 on earnings management. The financial crisis period is compared with the period before and after, setting a timeframe between 2002 and 2017. In addition, the period after the financial crisis is compared with the period before. Existing literature suggest that the main reasons for adjusting the level of earnings management, whether this causes earnings management to increase or decrease, hold a managerial incentive. Discretionary accruals were computed by means of the Performance matched Modified Jones Model as a measure of earnings management. Analysing data of German, Dutch, Spanish and Italian listed companies by means of a fixed effects model and a quantile regression model, this thesis finds evidence that companies conduct less earnings management during the financial crisis than the period before. No evidence is found that earnings management decreases the period after the financial crisis. Furthermore, findings suggest that more earnings management is conducted during the pre-crisis period compared to the post-crisis period.
Faculteit der Managementwetenschappen