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<p>This study investigates earnings management and its determinants in the agricultural and manufacturing sectors, with the aim of promoting the quality of financial reporting. The sample includes 1,381 actively operating companies in AP Vojvodina, Republic of Serbia, in the period from 2019 to 2021. Earnings management activities are identified using discretionary accruals computed with modified Jones model. Panel data analysis reveals that profitability and company size exert a positive and statistically significant influence on earnings management practices. Conversely, sales growth demonstrates a negative and statistically significant impact on earnings management. Furthermore, the analysis across the studied years indicates statistically significant differences in the prevalence of earnings management practices. However, the study found no significant differences in earnings management practices between the agriculture and manufacturing sectors. The significance of this study lies in its potential to provide valuable insights for investors, regulators, and financial analysts, helping them in making informed decisions. Moreover, it contributes to refinement of financial reporting standards and enforcement mechanisms, and enables a more accurate assessment of the financial health and performance of companies in both industries. The research also endeavors to identify sector-specific factors influencing earnings management dynamics, with the aim of enhancing transparency and optimizing decision-making processes in the financial environment.</p>
</abstract>

This study investigates earnings management and its determinants in the agricultural and manufacturing sectors, with the aim of promoting the quality of financial reporting. The sample includes 1,381 actively operating companies in AP Vojvodina, Republic of Serbia, in the period from 2019 to 2021. Earnings management activities are identified using discretionary accruals computed with modified Jones model. Panel data analysis reveals that profitability and company size exert a positive and statistically significant influence on earnings management practices. Conversely, sales growth demonstrates a negative and statistically significant impact on earnings management. Furthermore, the analysis across the studied years indicates statistically significant differences in the prevalence of earnings management practices. However, the study found no significant differences in earnings management practices between the agriculture and manufacturing sectors. The significance of this study lies in its potential to provide valuable insights for investors, regulators, and financial analysts, helping them in making informed decisions. Moreover, it contributes to refinement of financial reporting standards and enforcement mechanisms, and enables a more accurate assessment of the financial health and performance of companies in both industries. The research also endeavors to identify sector-specific factors influencing earnings management dynamics, with the aim of enhancing transparency and optimizing decision-making processes in the financial environment.

Evaluation of Earnings Management in Relation to the Quality of Financial Reporting: A Comparative Analysis of the Agriculture and Manufacturing Sectors

Contemporary Agriculture

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

This study investigates earnings management and its determinants in the agricultural and manufacturing sectors, with the aim of promoting the quality of...

Evaluation of Earnings Management in Relation to the Quality of Financial Reporting: A Comparative Analysis of the Agriculture and Manufacturing Sectors

Article Category: Original scientific paper

Published Online: May 21, 2024

Page range: 119 - 128

Received: Feb 04, 2024

Accepted: Feb 14, 2024

DOI: https://doi.org/10.2478/contagri-2024-0015

Keywords
earning management, modified Jones model, firm-specific factors, financial reporting quality, panel analysis, Vojvodina

© 2024 Teodora Ilić et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Evaluation of Earnings Management in Relation to the Quality of Financial Reporting: A Comparative Analysis of the Agriculture and Manufacturing Sectors

Article Category: Original scientific paper

Published Online: May 21, 2024

Page range: 119 - 128

Received: Feb 04, 2024

Accepted: Feb 14, 2024

DOI: https://doi.org/10.2478/contagri-2024-0015

Keywordsearning management, modified Jones model, firm-specific factors, financial reporting quality, panel analysis, Vojvodina

© 2024 Teodora Ilić et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
earning management, modified Jones model, firm-specific factors, financial reporting quality, panel analysis, Vojvodina