EARNINGS MANGEMENT OCCURENCE IN TIMES OF CRISIS: INSIGHTS FROM THE LITERATURE

Abstract

This paper discusses the main findings in the literature and offers interesting insights in order tounderstanding the behavior of firms in times of financial distress. In this respect the occurrence and magnitudeof earnings management activities are examined via global financial crisis, bringing into attention the contextualearnings management studies. The main discussions are related to the impact of economic environment onearnings management and further on value relevance of earnings in times of crisis. Since prior research isinconclusive in terms of earnings management occurrence and magnitude in times of financial crisis, futuresprings of research should be conducted in order to examine if there is a relationship between the financialcrisis and earnings management practices.

Keywords

• Earnings management
• Global financial crisis
• contextual earnings management studies