Upper echelons’ personality traits and corporate earnings management in Nigeria

Prior research has shown that a firm’s tendency to meet or beat earning targets is greater during bad economic times than good times. The paper extends this line of research by investigating which means of earnings management is used in different states of economy. A sample of non-financial companies listed on Korea Securities Market from 2003 to 2011 is used for empirical tests. The findings of this study are summarized as follows. The magnitude of discretionary accruals is negatively related to investment sentiment, indicating that firms tend to use positive discretionary accruals to manipulate reported income upward when the sentiment is pessimistic. However, the real activity based earnings management is not significantly associated with the state of economy. Collectively, this study contributes to behavioral finance and accounting literature by suggesting that managers use discretionary portion of accruals, but do not change their real operating activities, in order to meet or beat earnings targets in economic downturn.

Most studies in the area of corporate governance measure certain characteristics and the effects on financial performance; however, other authors only focus on profitability and do not analyze financial performance in all its dimensions; this is relevant because in some situations the government corporate governance can influence performance measured by liquidity, solvency or activity. The aim of the study is to relate the independence of corporate governance and the financial performance of non-listed companies using econometric techniques. This process was carried out by collecting primary information for the independent variable and secondary data for the dependent variable; the independence of corporate governance was measured by applying a confirmatory factor analysis to data collected through a survey, while the financial performance was measured through average Z factors created for liquidity, solvency, profitability and activity indicators. As a result, it was found that the independence of corporate governance influenced financial performance, but this relationship was statistically significant only with solvency and activity variables. As a result, it can be seen that there is a direct relationship between corporate governance independence and financial performance, in such a way that if the perception of board independence increases, financial performance can increase positively.

Acknowledgments
An acknowledgment to department SINDE from University Catholique Santiago of Guayaquil, who helped with the necessary resources to conduct this research.

Earnings management (EM, hereafter), which affects the quality of corporate financial information, continues to receive increased attention from practitioners and legislators. The paper deals with this topic and attempts to investigate the EM practices around the tax rate cut following the Tunisian tax reform of 2021. Evidence of EM is examined by focusing on both accounting and real EM. From a sample of 61 Tunisian public offering companies, observed from July 1, 2015 to June 30, 2021, the results estimated from the system GMM model argue that this tax rate reduction constitutes a real incentive to shift income from the period of higher tax rate (2020) towards the period of lower tax rate (2021) achieving significant savings for corporations. Furthermore, the results show that Tunisian firms have both accounting and real EM downward in the second half of 2020, and that the former is sharper. For the first half of 2021, the results show a joint use of accruals management and real management upwards, and that the latter is broader. These findings may be useful to tax policy-makers in the application of tax rules put in place to counter aggressive tax evasion. In addition, external auditors and tax auditors should consider the period around the change in the corporation tax rate to be more suspect.