International Journal of Disclosure and Governance, Forthcoming
Posted: 7 Nov 2010
Date Written: November 6, 2010
This study investigates whether culture in general and religion in particular mitigate earnings management. Using a cross-country data set, empirical tests based on rank regressions indicate that earnings management is unrelated to both religious affiliation and the degree of religiosity. In contrast, earnings management is found to be negatively related to the updated Hofstede (1980) cultural variable of individualism and positively related to uncertainty avoidance. Our results also indicate that the positive impact of the legal environment in mitigating earnings management, documented by Leuz et al. (2003), can no longer be demonstrated after controlling for culture.
Keywords: Earnings Management, Culture, Religion, Legal Environment
JEL Classification: A13, F23, G39, K49, M41, O57
Suggested Citation: Suggested Citation
Callen, Jeffrey L. and Morel, Mindy and Richardson, Grant A., Do Culture and Religion Mitigate Earnings Management? Evidence from a Cross-Country Analysis (November 6, 2010). International Journal of Disclosure and Governance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1704163