Publication: Relationship of earnings management and corporate social responsibility – emprical evidence from U.S.
Abstract
Finansal ve finansal olmayan raporlama arasındaki ilişki, akademik literatürde son zamanlarda önemli bir ilgi görmüştür. Şirketlerin sosyal sorumlulukları, finansal olmayan raporlamanın önemli bir kısmını oluşturmaktadır. Öte yandan, kazanç yönetimi, finansal raporlamanın kalitesini temsil eden bir gösterge olarak kabul edilir. Kazanç yönetimi ve Kurumsal Sosyal Sorumluluk (KSS) ilişkisini araştıran çalışmalar, şimdiye kadar karışık sonuçlar ortaya koymuştur. Vekâlet teorisi mali ve mali olmayan bildirim raporlaması arasındaki pozitif ilişkiyi açıklarken, yönetim teorisi mali ve mali olmayan bildirim raporlaması arasındaki ters ilişkiyi açıklar. Ancak, çalışmaların çoğu, kazanç kalitesi ile KSS performansı arasındaki ilişkiyi yürütürken tahakkuk bazlı kazanç yönetimi modellerini karşılaştırmayı ihmal etmiştir. Bu tezde Dechow ve Dichev (2002)’in ve Kothari, Leone ve Wasley (2005)'in modelleri kullanılarak isteğe bağlı tahakkuklar tahmin edilmiş ve kazanç yönetimini temsilen kullanılmıştır. Şirketlerin KSS performansı Thomson-Reuters finansal veri tabanı kullanılarak elde edilmiştir. 2011-2020 mali yılları için 26 finansal olmayan ABD şirketinden oluşan bir örneklem kullanan bu çalışma Dechow ve Dichev'in (2002) modelini Kothari, Leone ve Wasley'in (2005) tahmin etme modelinden daha güçlü bulmuştur. Ayrıca kazanç yönetimi ile KSS arasında anlamlı ilişki bulunamamıştır. Başka bir deyişle, şirketlerin KSS faaliyetleri, yöneticileri kazanç yönetimi faaliyetlerini uygulamaya teşvik etmez veya caydırmaz. Ancak kazanç yönetimi ile diğer değişkenler arasındaki ilişki yani; denetim süresi, kaldıraç oranı ve faaliyetlerden kaynaklanan nakit akışları negatif bulunurken, aktif karlılık oranı ile kazanç yönetimi arasındaki ilişkinin pozitif olduğu ve şirket büyüklüğü ile kazanç yönetimi arasında hiçbir ilişki belgelenmediği tespit edilmiştir.
The relationship between financial and non-financial statement reporting has drawn significant attention recently in the academic literature. The social responsibilities of the companies grant a significant portion of the non-financial reporting. On the other hand, earnings management is viewed as a proxy of financial reporting quality. Studies evaluating the relationship between earnings management (EM) and Corporate Social Responsibility (CSR) have documented mixed results so far. Whereas the Agency Theory explains the positive association between financial and non-financial statement reporting, the Stewardship Theory explains the inverse association between financial and non-financial statement reporting. However, most of the studies have neglected to compare the accrual-based earnings management models while conducting the association between earnings quality and CSR performance. Using Dechow and Dichev (2002) 's and Kothari, Leone, and Wasley (2005) 's model discretionary accruals are estimated and used as a proxy for earnings management in this thesis. Companies' CSR performance is captured by using Thomson- Reuters financial database. Using a sample of 26 non-financial U.S. companies for the fiscal years 2011-2020, this study finds the Dechow and Dichev (2002) 's model more powerful than Kothari, Leone, and Wasley (2005) 's model to estimate accruals EM. Furthermore, it has been found that there is no relationship between EM and CSR. In other words, the CSR activities of the companies don’t encourage or discourage managers to practice EM activities. However, the relationship between EM and other variables namely; audit-tenure, leverage, and cash flows from operations have been found to be negative whereas the relationship between return on asset and EM has been found to be positive and no relationship between size and EM has been documented.
The relationship between financial and non-financial statement reporting has drawn significant attention recently in the academic literature. The social responsibilities of the companies grant a significant portion of the non-financial reporting. On the other hand, earnings management is viewed as a proxy of financial reporting quality. Studies evaluating the relationship between earnings management (EM) and Corporate Social Responsibility (CSR) have documented mixed results so far. Whereas the Agency Theory explains the positive association between financial and non-financial statement reporting, the Stewardship Theory explains the inverse association between financial and non-financial statement reporting. However, most of the studies have neglected to compare the accrual-based earnings management models while conducting the association between earnings quality and CSR performance. Using Dechow and Dichev (2002) 's and Kothari, Leone, and Wasley (2005) 's model discretionary accruals are estimated and used as a proxy for earnings management in this thesis. Companies' CSR performance is captured by using Thomson- Reuters financial database. Using a sample of 26 non-financial U.S. companies for the fiscal years 2011-2020, this study finds the Dechow and Dichev (2002) 's model more powerful than Kothari, Leone, and Wasley (2005) 's model to estimate accruals EM. Furthermore, it has been found that there is no relationship between EM and CSR. In other words, the CSR activities of the companies don’t encourage or discourage managers to practice EM activities. However, the relationship between EM and other variables namely; audit-tenure, leverage, and cash flows from operations have been found to be negative whereas the relationship between return on asset and EM has been found to be positive and no relationship between size and EM has been documented.