The Effect of Brazilian convergence to IFRS on earnings managment by listed Brazilian nonfinancial companies
This article evaluates whether the changes in Brazilian accounting practices due to the convergence to international standards brought a reduction in earnings management by listed nonfinancial firms, causing an improvement in the quality of accounting information. We used the Jones model, as modified by Kothari, Leone & Wasley (2005), to measure earnings management by means of discretionary accruals using a sample of 361 companies between 2005 and 2011. The results indicate there was a change in earnings management through discretionary accruals after the convergence to IFRS in Brazil. We also found evidence that larger and more leveraged Brazilian firms tend to manage earnings less, but no evidence that being audited by one of the Big Four reduces the propensity for earnings management.
Keyword : Earnings management, IFRS, convergence, quality of accounting information, modified Jones model Gerenciamento de resultados, IFRS, convergência, qualidade da informação contábil, modelo Jones modificado