Abstract
The aim of the contribution is earnings management detection by using a model with the highest explanatory power, as well as verifying hypotheses about the existence of a statistically significant relationship between earnings management and country, as well as firm size within companies operating in the mining and quarrying sector in 2019 and 2018. Data were obtained from the Amadeus database. The sample contains 348 financial reports of companies from 2019 to 2017. Research is focused on V4 companies that have the sum of total assets higher than 2,000,000 EUR, as well as the sum of operating revenue is higher than 100,000 EUR. Three recommended models were used, namely the modified Jones model, Industry model, and Kothari model. The explanatory power of these models was tested by using several criteria. Based on the results, the modified Jones model was chosen for earnings management detection. According to the results, companies in the mining and quarrying sector in V4 use earnings management techniques to manage the profit. It is not possible to clearly determine in which direction they manage their profit more often. Different values were measured in the two observed periods. Based on the results, Czech and Slovak companies used earnings management techniques to increase their profit. On the other hand, Poland and Hungarian companies used earnings management techniques to decrease it. Very large as well as large companies used earnings management techniques to decrease their profit; medium-sized companies used earnings management techniques to increase it.
Publisher
Technical University of Kosice - Faculty of Mining, Ecology, Process Control and Geotechnology
Subject
Geochemistry and Petrology,Geology,Geotechnical Engineering and Engineering Geology
Cited by
8 articles.
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