Relationship between earnings management and corporate strategies: social responsibility and enterprise risk management

Submitted on 7th September 2017

This thesis revolves around financial transparency and its relationship with social transparency (CSR disclosure) and risk management at the managerial level. The first chapter identifies regulatory (10K) reports as the preferred disclosing channel for “social-transparent” companies (social-disclosing firms which are “high” in social activities) while “social-labelled” companies (social-disclosing firms which are “low” in social activities) choose to initiate disclosure in voluntary standalone CSR reports. The second chapter uses this identification strategy to examine whether “social-transparent” companies are also financially transparent. I find that “social-labelled” firms decrease the quality of financial information in the first period after first issuance of a CSR voluntary report. Contrarily, “social-transparent” firms increase the quality of their financial reporting after initiation of CSR disclosure on the 10K, suggesting equal financial and social transparent behaviour. In the last chapter, I show how the implementation of an Enterprise Risk Management Committee (ERMC) has a negative impact transaction-based earnings management but not clear impact on accrual based earnings management.

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Source
Universitat Pompeu Fabra. Departament d'Economia i Empresa
Length of Resource
116 pages
Author
Parrondo Tort, Luz
Date Published
Publication Type
paper
Resource Type
academic