Manipulation of Earnings Reports in Spain - Some Evidence

24 Pages Posted: 14 Nov 2005

See all articles by Oriol Amat

Oriol Amat

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Catherine Gowthorpe

Oxford Brookes University - Business School

Jordi Perramon

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Date Written: July 1, 2005

Abstract

Accounting regulation is a highly topical issue for listed companies in Europe. From 1 January 2005 all companies listed in the EU member states are required to produce financial reports compliant with international accounting standards. Financial reports will be comparable with each other only if full compliance with the international standards can be ensured. Historically, however, an enduring weakness of the international standard-setting regime has been its inability to enforce compliance with its standards. There is a danger that implementation and compliance will be variable across the adopting countries, and that deeply ingrained national reporting practices will persist. The purpose of this paper is to examine some distinctive elements of Spanish financial reporting practices. Spanish financial reporting by major companies demonstrates a tendency towards quite overt manipulation of the earnings figures. The research reported in the paper firstly identifies four common earnings manipulation practices, and then proceeds to examine their incidence in the financial statements of the IBEX-35 companies over a three year period.

Keywords: Financial reporting, Spain, earnings manipulation, IBEX-35

JEL Classification: M41

Suggested Citation

Amat, Oriol and Gowthorpe, Catherine and Perramon, Jordi, Manipulation of Earnings Reports in Spain - Some Evidence (July 1, 2005). Available at SSRN: https://ssrn.com/abstract=847608 or http://dx.doi.org/10.2139/ssrn.847608

Oriol Amat (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
+34 93 542 16 55 (Phone)
+34 93 542 17 46 (Fax)

Catherine Gowthorpe

Oxford Brookes University - Business School ( email )

Oxford, OX33 1HX
United Kingdom
01865 485981 (Phone)

Jordi Perramon

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
3493 542-1753 (Phone)
3493 542-1746 (Fax)

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