Transformations  in
Business & Economics

ACCRUALS EARNINGS MANAGEMENT IN EMERGING MARKETS UNDER THE TRANSITION TO IFRS: THE CASE OF ROMANIAN LISTED COMPANIES
Costel Istrate, Iuliana Eugenia Georgescu, Mihai Carp, Ioan Bogdan Robu, Leontina Pavaloaia

ABSTRACT. In decision-making process, the stakeholders need high-quality financial information provided by the financial statements of listed companies. This study aims to assess the extent to which accruals earnings management operations, as a dimension of financial accounting quality, are used by the Romanian listed companies depending on auditor's affiliation to the Big 4 group, on the activity field and the transition to IFRS. The study was conducted at the level of companies listed on the Bucharest Stock Exchange from 2006 to 2014. The research results indicate a decrease in the use of accruals earnings management following IFRS transition, compared to the pre-IFRS period by different activity fields without showing a significant difference between the companies audited by the Big 4 or Non- Big 4 .

KEYWORDS: accruals earnings management, accounting quality, transition to IFRS, Romanian listed companies, discretionary accruals measurement.

JEL classification: C59, M41, M48.