The trend in the earning managements in relation to the improvements in accounting standards

Resumen

This paper studies the temporal trend of earnings management over the last decade in a sample of German listed companies. To get this purpose, we analyse discretionary accruals of firms yielded from 2001 to 2010 applying the Seemingly Unrelated Regression (SUR) methodology and highlighting the mandatory character of IFRS from 2005 on. Our results indicate that as companies have incentives to adopt IFRS, the level of earnings management decreases for a certain period of time. However, we find no evidence about higher financial reporting quality in mandatory IFRS adopters after IFRS adoption.