A three-dimensional Analysis of the Net Financial Results in Public Enterprises
DOI:
https://doi.org/10.15678/ZNUEK.2023.1000.0207Keywords:
earnings quality, earnings persistence, earnings smoothness, discretionary accruals, public companiesAbstract
Objective: The paper aims to provide a diagnostic assessment of the net profits (losses) in international public companies listed in the WIG-CEE index from 2011–2020.
Research Design & Methods: The quality of the reported earnings was illustrated by diversified coefficients of stability and smoothness of net profit (loss) and discretionary accruals, extracted by the Jones model based on the cash and balance sheet methods. Spearman’s rank correlation coefficient was used to assess the relationship between the tested variables.
Findings: Strategies of intentionally lowering net financial results dominate the research sample. No statistically significant relationships were observed between the quality of net profit (loss) measures classified in separate generic groups.
Implications / Recommendations: The results of empirical analyses reflect that the evaluation of the earnings quality of enterprises should be based on various economic measures, as the use of individual indicators may lead to erroneous evaluation.
Contribution: The research may be important from the perspective of economic practice, looking for tools and instruments for predicting activities aimed at artificially shaping the financial result of enterprises.
Downloads
References
An Y. (2017), Measuring Earnings Quality over Time, „International Journal of Economics and Financial Issues”, vol. 7(3).
Blackwell D. (1953), Equivalent Comparisons of Experiments, „The Annals of Mathematical Statistics”, vol. 24(2), https://doi.org/10.1214/aoms/1177729032. DOI: https://doi.org/10.1214/aoms/1177729032
Buk H. (2012), Czytelność informacji o kapitałach własnych prezentowanych w sprawozdaniu finansowym, „Acta Universitatis Lodziensis. Folia Oeconomica”, nr 262, https://dx.doi.org/11089/1836.
Bushman R.M., Smith A.J. (2003), Transparency, Financial Accounting Information and Corporate Governance, „Economic Policy Review”, vol. 9(1). DOI: https://doi.org/10.2139/ssrn.253302
Chen Ch., Kim J.B., Yao L. (2017), Earnings Smoothing: Does It Exacerbate or Constrain Stock Price Crash Risk?, „Journal of Corporate Finance”, vol. 42, https://doi.org/10.1016/j.jcorpfin.2016.11.004. DOI: https://doi.org/10.1016/j.jcorpfin.2016.11.004
Comporek M. (2021), Estimating Accrual-based Models in Poland: The Time Series Data Approach and the Cross-sectional Data Approach, „Argumenta Oeconomica”, nr 1(46), https://doi/org/10.15611/aoe.2021.1.10. DOI: https://doi.org/10.15611/aoe.2021.1.10
Dichev I.D., Graham J.R., Harvey C.R., Rajgopal S. (2013), Earnings Quality: Evidence from the Field, „Journal of Accounting and Economics”, vol. 56(2–3), supplement 1, https://doi.org/10.1016/j.jacceco.2013.05.004. DOI: https://doi.org/10.1016/j.jacceco.2013.05.004
Eppler M.J. (2006), Managing Information Quality: Increasing the Value of Information in Knowledge-intensive Products and Processes, Springer Science & Business Media, Heidelberg. DOI: https://doi.org/10.1007/3-540-32225-6
Gassen J., Fülbier R.U. (2015), Do Creditors Prefer Smooth Earnings? Evidence from European Private Firms, „Journal of International Accounting Research”, vol. 14(2), https://dx.doi.org/10.2139/ssrn.2496791. DOI: https://doi.org/10.2308/jiar-51130
Gmytrasiewicz M. (2008), Rachunkowość. Podstawowe założenia i zasady, Difin, Warszawa.
Gul F.A., Leung S., Srinidhi B. (2000), The Effect of Investment Opportunity Set and Debt Level on Earnings-returns Relationship and the Pricing of Discretionary Accruals, „SSRN Electronic Journal”, https://doi.org/10.2139/ssrn.236080. DOI: https://doi.org/10.2139/ssrn.236080
Hendriksen E.A., Breda M.F. van (2002), Teoria rachunkowości, Wydawnictwo Naukowe PWN, Warszawa.
Ignatowski R., Sadowska B.H., Wójcik-Jurkiewicz M. (2020), Oblicza raportowania w perspektywie środowiskowej, Wydawnictwo Ius Publicum, Instytut Prawa Gospodarczego, Katowice.
Jegadeesh N., Livnat J. (2006), Revenue Surprises and Stock Returns, „Journal of Accounting and Economics”, vol. 41(1–2), https://doi.org/10.1016/j.jacceco.2005.10.003. DOI: https://doi.org/10.1016/j.jacceco.2005.10.003
Jones J.J. (1991), Earnings Management during Import Relief Investigations, “Journal of Accounting Research”, vol. 29(2), https://doi.org/10.2307/2491047. DOI: https://doi.org/10.2307/2491047
Kamp B. (2002), Earnings Quality Assessment by a Sell-side Financial Analyst, „Issues in Accounting Education”, vol. 17(4), https://doi.org/10.2308/iace.2002.17.4.361. DOI: https://doi.org/10.2308/iace.2002.17.4.361
Khuong N.V., Abdul Rahman A.A., Thuan P.Q., Liem N.T., Anh L.H.T., Thuy C.T.M., Ly H.T.N. (2022), Earnings Management, Board Composition and Earnings Persistence in Emerging Market, „Sustainability”, vol. 14(3), https://doi.org/10.3390/su14031061. DOI: https://doi.org/10.3390/su14031061
Menicucci E. (2020), Earnings Quality. Definitions, Measures, and Financial Reporting, Palgrave-Macmillan, London. DOI: https://doi.org/10.1007/978-3-030-36798-5
Michalak J. (2018), Metody pomiaru i determinanty jakości informacji w raportach spółek giełdowych, Wydawnictwo Uniwersytetu Łódzkiego, Łódź. DOI: https://doi.org/10.18778/8142-395-3
Michalczyk L. (2013), Rola inżynierii rachunkowości w kształtowaniu wyników finansowych przedsiębiorstwa, Wolters Kluwer, Warszawa.
Międzynarodowe Standardy Sprawozdawczości Finansowej (2011), Stowarzyszenie Księgowych w Polsce, Warszawa.
Nowak E. (2015), Klasyfikacyjna funkcja rachunkowości (w:) Rachunkowość a controlling, Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu, nr 399, red. E. Nowak, P. Bednarek, Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu, Wrocław, https://doi.org/10.15611/pn.2015.399.36. DOI: https://doi.org/10.15611/pn.2015.399.36
Organizacja rachunkowości (1999), red. M. Dobija, Wydawnictwo Akademii Ekonomicznej w Krakowie, Kraków.
Rowińska M. (2013), Cechy jakościowe sprawozdania finansowego jednostek gospodarczych, „Zeszyty Uniwersytetu Szczecińskiego nr 757. Finanse, Rynki Finansowe, Ubezpieczenia”, nr 58.
Schipper K., Vincent L. (2003), Earnings Quality, „Accounting Horizons”, vol. 17(s-1), https://doi.org/10.2308/acch.2003.17.s-1.97. DOI: https://doi.org/10.2308/acch.2003.17.s-1.97
Sloan R. (1996), Do Stock Prices Fully Reflect Information in Accruals and Cash Flows about Future Earnings?, „The Accounting Review”, vol. 71(3).
Speier C., Valacich J.S., Vessey I. (1999), The Influence of Task Interruption on Individual Decision Making: An Information Overload Perspective, „Decision Sciences”, vol. 30(2), https://doi.org/10.1111/j.1540-5915.1999.tb01613.x. DOI: https://doi.org/10.1111/j.1540-5915.1999.tb01613.x
Szychta A. (2011), Wynik całościowy w sprawozdaniach finansowych spółek publicznych (w:) Rachunkowość, audyt i kontrola w zarządzaniu, red. I. Sobańska, M. Turzyński, Wydawnictwo Uniwersytetu Łódzkiego, Łódź.
Tokarski A. (2011), Wykorzystanie informacji pochodzących ze sprawozdawczości finansowej do wykrywania objawów zagrożeń finansowych w funkcjonowaniu przedsiębiorstwa, „Nauki o Finansach”, vol. 3(8).
Turzyński M. (2011), Koncepcje zysku w retrospektywnym ujęciu Mejera Lichtensztejna, „Acta Universitatis Lodziensis. Folia Oeconomica”, nr 249, http://dx.doi.org/11089/600.
Winarno W.W., Krismiaji K., Handayani H., Purwantini M. (2022), Earnings Management, Board of Directors, and Earnings Persistence: Indonesian Evidence, „Jurnal Akuntansi dan Auditing Indonesia”, vol. 26(1), https://doi.org/10.20885/jaai.vol26.iss1.art5. DOI: https://doi.org/10.20885/jaai.vol26.iss1.art5
Downloads
Published
Issue
Section
License
Copyright (c) 2023 Zeszyty Naukowe Uniwersytetu Ekonomicznego w Krakowie / Cracow Review of Economics and Management
This work is licensed under a Creative Commons Attribution 4.0 International License.
