Does the Latin model of corporate governance perform worse than other models in preventing earnings management?

• Type: Article in International Scientific Journal
• Date: 2013

Authors

Carlos Alves (Author) FEP; Ernesto Vicente (Author) FEP

Journal

Title: Applied Financial Economics

Vol. 23 No. 21

Pages: 1663-1673

ISSN: 0960-3107

Publisher: Chapman & Hall

Indexing

Scopus - 5 Citations

Econlit

Scientific classification

FOS: Social sciences

CORDIS: Social sciences

Other information

Authenticus ID: P-008-G08

Abstract (EN): Traditionally, the Latin model of corporate governance had been a predominant model in some countries; however, this model is increasingly becoming out of fashion. Using a database of Portuguese and Brazilian firms, we investigated whether the Latin model performs worse than other models (i.e. variants of the Continental and Anglo-Saxon models) in terms of preventing earnings management. We conclude that, in general, companies that adopt the Latin model have lower levels of earnings management than other companies, and that switching from the Latin model to another model does not cause a generalized decrease in the level of discretionary accruals. Additionally, firms that move away from the Latin model are not predominantly those with extremely high levels of discretionary accruals.

Language: English

Type (Professor's evaluation): Scientific