CORPORATE SOCIAL RESPONSIBILITY AND RESULTS MANAGEMENT BY ACCRUALS

Abstract

The study aimed to evaluate the relationship between investments disclosed in corporate social responsibility (CSR) and the practices of accruals earnings management (EM) in Brazilian companies. For this, a descriptive, documental and quantitative research was carried out in the period from 2011 to 2015. The sample included 122 companies, which had the necessary information to carry out the study. The results indicate that CSR is related to EM, and that companies with higher levels of CSR practice more EM when it focus on increasing profits. For companies that aim to reduce profits through EM, CSR has shown to be negatively related, ie, the more investments disclosed in CSR, the lower the EM level. Thus, we can conclude that CSR practices can configure an additional aspect about factors related to EM in emerging countries such as Brazil, which is in line with part of the literature in developed countries. This result can contribute to regulators, auditors, and other stakeholders in the quality of accounting information, as it exposes a possible use of CSR by Brazilian companies to mask a profit inflation through the management of accruals.