FINANCIAL CONSTRAINTS AND EARNINGS MANAGEMENT: A STUDY CONSIDERING ELEMENTS OF THE RECENT BRAZILIAN ECONOMY

Authors

  • Marcela Caroline Sibim Barbosa Universidade Federal do Paraná (UFPR)
  • Marcos Wagner da Fonseca Universidade Federal do Paraná (UFPR)

DOI:

https://doi.org/10.22561/cvr.v35i3.8210

Keywords:

Earnings Management; Financial Constraints; Economic Scenes

Abstract

The objective of this research was to analyze the relationship between financial constraints and earnings management, in the face of different economic scenarios. The sample of 194 companies comprised companies listed on [B]3 in the period from 2010 to 2020. The economic scenarios are represented by the variables economic crises, exchange rate and interest rate. Discretionary accruals were estimated using the Kothari, Leone and Wasley (2005) model. The results indicated a significant relationship at 1% between financial constraints and discretionary accruals, but the signal did not meet the expected relationship that financially constrained companies manage their results more. With regard to moderation, economic crises are positive and significant. On the other hand, the exchange rate negatively moderates the relationship between companies with restrictions and earnings management. Finally, the moderation of the interest rate did not show statistical significance.

Author Biographies

Marcela Caroline Sibim Barbosa, Universidade Federal do Paraná (UFPR)

Doutora em Contabilidade pela Universidade Federal do Paraná. Endereço: Rua Renato Lopes de Oliveira, 17, Centro, CEP: 18690-041, Itatinga, SP, Brasil. Telefone: (14) 3848-1351. E-mail: marcela.sibim@gmail.com

Marcos Wagner da Fonseca, Universidade Federal do Paraná (UFPR)

Doutor em Desenvolvimento Econômico pela Universidade Federal do Paraná, Professor associado do Departamento de Administração Geral e Aplicada da Universidade Federal do Paraná. Professor Permanente do Programa de Pós-Graduação em Contabilidade e do Programa de Pós-Graduação em Gestão de Organizações, Liderança e Decisão, ambos da UFPR. Endereço: Rua Prefeito Lothario Meissner, 632 - 2 andar, Jardim Botânico, CEP: 0210170, Curitiba, PR, Brasil. Telefone: (41) 33604368. E-mail: mwfonseca@ufpr.br

References

Almeida, H., & Campello, M. (2001). Financial constraints and investment-cash flow sensitivities: New research directions. In Twelfth Annual Utah Winter Finance Conference. http://dx.doi.org/10.2139/ssrn.298027

Almeida, H., & Campello, M. (2010). Financing frictions and the substitution between internal and external funds. Journal of Financial and Quantitative Analysis, 45(3), 589-622. doi:10.1017/S0022109010000177

Almeida, H., Campello, M., & Weisbach, M. S. (2004). The cash flow sensitivity of cash. The journal of finance, 59(4), 1777-1804. https://doi.org/10.1111/j.1540-6261.2004.00679.x

Asel, J. A., Posch, A., & Speckbacher, G. (2011). Squeezing or cuddling? The impact of economic crises on management control and stakeholder management. Review of Managerial Science, 5(2-3), 213-231. DOI 10.1007/s11846-010-0051-4

Bernanke, B. S., Gertler, M., & Gilchrist, S. (1996). The flight to quality and the financial accelerator. Review of Economics and Statistics, 78(1), 1-15.

Camargo, A. R., & Carvalho, F. L. (2022). Impacto do gerenciamento de resultados e da restrição financeira na estrutura de capital de empresas brasileiras. Revista Universo Contábil, 17(2), 77-98. doi:10.4270/ruc.2021214.

Chang, C. C., Kao, L. H., & Chen, H. Y. (2018). How does real earnings management affect the value of cash holdings? Comparisons between information and agency perspectives. Pacific-Basin Finance Journal, 51, 47-64. https://doi.org/10.1016/j.pacfin.2018.06.001

Chang, F. Y., Hsin, C. W., & Shiah-Hou, S. R. (2013). A re-examination of exposure to exchange rate risk: The impact of earnings management and currency derivative usage. Journal of Banking & Finance, 37(8), 3243–3257. https://doi.org/10.1016/j.jbankfin.2013.03.007

Chen, T., Luo, W., & Xiang, X. (2022). Financial constraints, exchange rate changes, and export price: Evidence from Chinese exporters. Finance Research Letters, 48, 102823.

Cimini, R. (2015). How has the financial crisis affected earnings management? A European study, Applied Economics, 47(3), 302-317, doi: 10.1080/00036846.2014.969828

Comitê de Datação de Ciclos Econômicos (CODACE) (2020, junho). Comunicado do Comitê de datação de ciclos econômicos. Recovered from chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/viewer.html?pdfurl=https%3A%2F%2Fportalibre.fgv.br%2Fsites%2Fdefault%2Ffiles%2F2020-06%2Fcomunicado-do-comite-de-datacao-de-ciclos-economicos-29_06_2020-1.pdf&clen=337027&chunk=true

da Silva Flores, E., Sampaio, J.O., Beiruth, A.X. and Brugni, T.V. (2023), "Earnings management during the COVID-19 crisis: evidence from the Brazilian and American capital markets", Journal of Accounting in Emerging Economies, 13 (4), 760-783. https://doi.org/10.1108/JAEE-10-2021-0317

da Silva Jardim, M., Machado, D. P., Frare, A. B., & de Gomes, D. G. (2022). Desempenho Financeiro e Escolhas Contábeis no Período Pandêmico: Efeitos Sobre o Gerenciamento de Resultados Listadas na B3. Revista FSA (Centro Universitário Santo Agostinho), 19(8), 122-147. http://dx.doi.org/10.12819/2022.19.8.6

Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1995). Detecting earnings management. The Accounting Review, 70 (2), 193–225. https://www.jstor.org/stable/248303

DeFond, M. L., & Jiambalvo, J. (1994). Debt covenant violation and manipulation of accruals. Journal of accounting and economics, 17(1-2), 145-176. https://doi.org/10.1016/0165-4101(94)90008-6

Dimitras, A. I., Kyriakou, M. I., & Iatridis, G. (2015). Financial crisis, GDP variation and earnings management in Europe. Research in International Business and Finance, 34, 338-354. https://doi.org/10.1016/j.ribaf.2015.02.017

Farrell, K., Unlu, E., & Yu, J. (2014). Stock repurchases as an earnings management mechanism: The impact of financing constraints. Journal of Corporate Finance, 25, 1–15. http://dx.doi.org/10.1016/j.jcorpfin.2013.10.004

Fávero, L. P., Belfiore, P., Silva, F. L., & Chan, B. L. (2009). Análise de dados: modelagem multivariada para tomada de decisões. Rio de Janeiro: Elsevier.

Fazzari, S., Hubbard, R. G., & Petersen, B. (1988). Investment, financing decisions, and tax policy. The American Economic Review, 78(2), 200–205. https://www.jstor.org/stable/1818123

Filip, A., & Raffournier, B. (2014). Financial crisis and earnings management: The European evidence. The International Journal of Accounting, 49(4), 455-478. https://doi.org/10.1016/j.intacc.2014.10.004

Flores, E., Weffort, E.F.J., Silva, A.F.d. & Carvalho, L.N.G. (2016). Earnings management and macroeconomic crises: Evidence from Brazil and USA capital markets. Journal of Accounting in Emerging Economies, 6(2), 179-202. https://doi.org/10.1108/JAEE-07-2013-0037

Frame, W. S., Srinivasan, A., & Woosley, L. (2001). The effect of credit scoring on small-business lending. Journal of money, credit, and banking, 33(3), 813-825. https://doi.org/2673896

Ghorbani, A., & Salehi, M. (2020). Earnings management and the informational and disciplining role of debt: evidence from Iran. Journal of Asia Business Studies, 15(1), 72-87 https://doi.org/10.1108/JABS-11-2019-0336.

Habib, A., Uddin Bhuiyan, B. & Islam, A. (2013). Financial distress, earnings management and market pricing of accruals during the global financial crisis. Managerial Finance, 39(2), 155-180. https://doi.org/10.1108/03074351311294007

Hadlock, C. J., & Pierce, J. R. (2010). New evidence on measuring financial constraints: Moving beyond the KZ index. The Review of Financial Studies, 23(5), 1909-1940. https://doi.org/10.1093/rfs/hhq009

Hao, Q., & Li, K. (2016). The bright side of discretionary accruals: Evidence from finance and innovation. European Financial Management, 22(4), 540-575. https://doi.org/10.1111/eufm.12068

Healy, P. M. (1985). The effect of bonus schemes on accounting decisions. Journal of accounting and economics, 7(1), 85–107. https://doi.org/10.1016/0165-4101(85)90029-1

Healy, P. M., & Wahlen, J. M. (1999). A review of the earnings management literature and its implications for standard setting. Accounting Horizons, 13(4), 365-383. https://doi.org/10.2308/acch.1999.13.4.365

Hribar, P. & Collins, D. (2002). Errors in estimating accruals: implications for empirical research. Journal of Accounting Research, 40(1), 105-134. ttps://doi.org/10.1111/1475-679X.00041

Iatridis, G., & Dimitras, A. I. (2013). Financial crisis and accounting quality: evidence from five European countries. Advances in Accounting, 29(1), 154-160. https://doi.org/10.1016/j.adiac.2013.03.001

Kaplan, S. N., & Zingales, L. (1997). Do investment-cash flow sensitivities provide useful measures of financing constraints?. The quarterly journal of economics, 112(1), 169–215. https://doi.org/10.1162/003355397555163

Kappel, R. D. S. (2017). Decisão de investimento: impactos da restrição financeira e das crises econômicas. (Tese de Doutorado). Universidade do Vale do Rio dos Sinos (UNISINOS), São Leopoldo, RS, Brasil. Recovered from http://www.repositorio.jesuita.org.br/handle/UNISINOS/6687

Kirch, G. (2012). Restrições ao crédito e a interdependência das decisões financeiras da firma: um estudo multipaís. (Tese de Doutorado), Universidade Federal do Rio Grande do Sul, Porto Alegre, Rio Grande do Sul, Brasil. Recovered from: https://www.lume.ufrgs.br/handle/10183/48968

Kirch, G., Procianoy, J. L., & Terra, P. R. S. (2014). Restrições financeiras e a decisão de investimento das firmas brasileiras. Revista Brasileira de Economia, 68(1), 103-123.

Kothari, S. P., Leone, A. J., & Wasley, C. E. (2005). Performance matched discretionary accrual measures. Journal of accounting and economics, 39(1), 163–197. https://doi.org/10.1016/j.jacceco.2004.11.002

Lamont, O., Polk, C., & Saaá-Requejo, J. (2001). Financial constraints and stock returns. The review of financial studies, 14(2), 529-554. https://doi.org/10.1093/rfs/14.2.529

Linck, J. S., Netter, J., & Shu, T. (2013). Can managers use discretionary accruals to ease financial constraints? Evidence from discretionary accruals prior to investment. The Accounting Review, 88(6), 2117-2143. https://doi.org/10.2308/accr-50537

Lock, B. Q., Chu, E. Y., Song, S. I., & Lee, L. Y. (2019). Exchange Rate Movements, Earnings Management and Stock Returns in Malaysia. Capital Markets Review, 27(1), 53–68.

Machado, S. J., Martins, S. R., & Miranda, V. K. (2012). Acumulações discricionárias extremas em ambientes de recessão: uma análise comparativa entre Brasil e Estados Unidos. Revista Contabilidade, Gestão e Governança, 15(3). Recovered from https://journalamg.org/contabil/article/view/494

Mafrolla, E., & D'Amico, E. (2017). Borrowing capacity and earnings management: An analysis of private loans in private firms. Journal of Accounting and Public Policy, 36(4), 284-301. https://doi.org/10.1016/j.jaccpubpol.2017.05.001

Mishkin, F. S. (1995). Symposium on the monetary transmission mechanism. Journal of Economic Perspectives, 9(4), 3–10. DOI: 10.1257/jep.9.4.3

Mohanram, P. S. (2003). How to manage earnings management. Accounting World, 10(1), 1-12.

Mu, C., Wang, A., & Yang, J. (2017). Optimal capital structure with moral hazard. International review of economics & finance, 48, 326-338. https://doi.org/10.1016/j.iref.2016.12.006

Park, Y. W., & Shin, Hyun-Han. (2004). Board composition and earnings management in Canada. Journal of Corporate Finance, 10(3), 431-457. doi:10.1016/S0929-1199(03)00025-7

Paulo, E., & Mota, R. H. G. (2019). Ciclos econômicos e estratégias de gerenciamento de resultados contábeis: um estudo nas companhias abertas brasileiras. Revista Contabilidade & Finanças, 30(80), 216-233. https://doi.org/10.1590/1808-057x201806870

Portal, M. T., Zani, J., & Silva, C. E. S. D. (2012). Fricções financeiras e a substituição entre fundos internos e externos em companhias brasileiras de capital aberto. Revista Contabilidade & Finanças, 23(58), 19-32. https://doi.org/10.1590/S1519-70772012000100002

Santos, A. dos, & Paulo, E. (2006). Diferimento das perdas cambiais como instrumento de gerenciamento de resultados. BBR-Brazilian Business Review, 3(1), 15-31.

Schipper, K. (1989). Commentary on earnings management. Accounting Horizons, 3(4), 91–102.

Sequeira, J. M. (2021). Monetary policy surprises, stock returns, and financial and liquidity constraints in an exchange rate monetary policy system. The Quarterly Review of Economics and Finance, 81, 226-236.

Serafini, D. G., & Sheng, H. H. (2011). O uso de derivativos da taxa de câmbio e o valor de mercado das empresas brasileiras listadas na Bovespa. Revista de Administração Contemporânea, 15(2), 283-303.

Silva, A. F. D., Weffort, E. F. J., Flores, E. D. S., & Silva, G. P. D. (2014). Earnings management and economic crises in the Brazilian capital market. Revista de Administração de Empresas, 54(3), 268-283. https://doi.org/10.1590/S0034-759020140303

Sincerre, B. P., Sampaio, J. O., Famá, R., & Santos, J. O. D. (2016). Emissão de dívida e gerenciamento de resultados. Revista Contabilidade & Finanças, 27, 291-305. https://doi.org/10.1590/1808-057x201601660

Sticca, R. M. (2018). Effects of the exchange rate on the adoption of hedge accounting: evidence from Brazil (Tese de Doutorado), Universidade de São Paulo, Ribeirão Preto, SP, Brasil. Recovered from https://www.teses.usp.br/teses/disponiveis/96/96133/tde-12122018-155403/en.php

Tardin, N., & de Oliveira, W. L. (2022). Do companies manage taxable and accounting earnings simultaneously in times of crisis? Advances in Scientific and Applied Accounting, 14(3), 192–203/204. https://doi.org/10.14392/asaa.2021140307

Thanh, S. D., Canh, N. P., & Ha, N. T. T. (2020). Debt structure and earnings management: A non-linear analysis from an emerging economy. Finance Research Letters, 35, 101283. https://doi.org/10.1016/j.frl.2019.08.031

Tortoli, J. P., & Moraes, M. B. da Costa Earnings management during financial crises in Latin America. Anais do XII Congresso da ANPCONT 2018, João Pessoa, PB, Brasil, 12. Recovered from https://www.anpcont.org.br/pdf/2018_CUE309.pdf

Türegün N. (2020). Does financial crisis impact earnings management? Evidence from Turkey. J Corp Acct Fin, 31, 64–71. https://doi. org/10.1002/jcaf.22418

Watts RL, & Zimmerman JL (1986). Positive accounting theory. Eaglewood Cliffs, NJ: Prentice Hall.

Whited, T. M., & Wu, G. (2006). Financial constraints risk. The Review of Financial Studies, 19(2), 531–559. https://doi.org/10.1093/rfs/hhj012

Xu, Y., & Guo, Y. (2021). Exchange rates disconnect and financial constraints—evidence from Chinese firms. Journal of Comparative Economics, 49(4), 1008–1019.

Yan, H., Liu, Z., Wang, H., Zhang, X., & Zheng, X. (2022). How does the COVID-19 affect earnings management: Empirical evidence from China. Research in international business and finance, 63, 101772. https://doi.org/10.1016/j.ribaf.2022.101772

Zeitun, R., Temimi, A., & Mimouni, K. (2017). Do financial crises alter the dynamics of corporate capital structure? Evidence from GCC countries. The Quarterly Review of Economics and Finance, 63, 21-33. https://doi.org/10.1016/j.qref.2016.05.004

Downloads

Published

2024-12-26

How to Cite

BARBOSA, M. C. S.; FONSECA, M. W. da. FINANCIAL CONSTRAINTS AND EARNINGS MANAGEMENT: A STUDY CONSIDERING ELEMENTS OF THE RECENT BRAZILIAN ECONOMY. Contabilidade Vista & Revista, [S. l.], v. 35, n. 3, p. 53–86, 2024. DOI: 10.22561/cvr.v35i3.8210. Disponível em: https://revistas.face.ufmg.br/index.php/contabilidadevistaerevista/article/view/8210. Acesso em: 24 dec. 2025.

Issue

Vol. 35 No. 3 (2024): Volume 35| Número 3| Set./Dez. | 2024

Section

Artigos

License

A submissão do texto para avaliação implica no compromisso de que o material não seja submetido a um outro periódico nacional ou internacional e autoriza, caso aprovado, a sua publicação.

Os artigos publicados são de responsabilidade dos autores não traduzindo, necessariamente, a opinião da revista. A reprodução dos artigos, total ou parcial, pode ser feita desde que citada esta fonte.

Considerando que o(s) autor(es) do texto concorda(m) com a sua publicação, caso o mesmo seja aprovado pela revista, sem que disso lhe seja devido qualquer remuneração, reembolso ou compensação de qualquer natureza, a Revista Contabilidade Vista & Revista através do Departamento de Ciências Contábeis da Faculdade de Ciências Econômicas da Universidade Federal de Minas Gerais, detém todos os direitos autorais dos textos publicados, conforme a legislação brasileira vigente.

Os direitos autorais para artigos publicados nesta revista são do autor, com direitos de primeira publicação para a revista. Em virtude de aparecerem nesta revista de acesso público, os artigos são de uso gratuito, com atribuições próprias, em aplicações educacionais e não-comerciais. A revista permitirá o uso dos trabalhos publicados para fins não-comerciais, incluindo direito de enviar o trabalho para bases de dados de acesso público.