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Earnings management and corporate social responsibility: UK evidence

Almahrog, Yousf and Ali Aribi, Zakaria and Arun, Thankom (2018) 'Earnings management and corporate social responsibility: UK evidence.' Journal of Financial Reporting and Accounting, 16 (2). 311 - 332. ISSN 1985-2517

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Abstract

Purpose The paper attempt a closer investigation to re-interpret the role of CSR in limiting the extreme practices in earnings management (EM), using evidence from large UK companies. Design/methodology/approach The study has employed content analysis and disclosure index to measure the level of CSR. we measure EM based on discretionary accruals using cross-sectional version of the modified Jones model Findings The findings of this study reveal that companies with a higher commitment to CSR activities are less likely to manage earnings through accruals. Originality/value This study shed more light on the potential impact of CSR on earnings management in the context of the UK.Prior research on the impact of CSR on earnings management has used exclusively CSR scores, provided by CSR score indices.The manual measurement employed in this study for CSR (disclosure index/content analysis) is considered to provide a more detailed and precise measure.

Item Type: Article
Uncontrolled Keywords: CSR, UK, Voluntary disclosure, Earnings management
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Accounting Centre
Depositing User: Elements
Date Deposited: 04 Mar 2019 11:26
Last Modified: 04 Mar 2019 11:26
URI: http://repository.essex.ac.uk/id/eprint/24145

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