Earnings quality among high-share liquidity companies: evidence from Central and Eastern European firms
| Dec 31, 2023
Article Category: Empirical Paper
Published Online: Dec 31, 2023
Page range: 315 - 332
Received: Dec 12, 2022
Accepted: Jul 14, 2023
DOI: https://doi.org/10.2478/ijme-2023-0017
Keywords
© 2023 Michal Comporek, published by Sciendo
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Paper’s objectives
The main aim of the paper is to analyze the earnings quality of high-share liquidity companies from Poland, Romania, and Hungary whose activities are outside the finance sector.
Methods applied
Earnings quality, i.e., earnings persistence, predictability, and accruals quality, was assessed using the Kruskal–Wallis test, the
Findings
The research demonstrates that companies listed in the Bucharest Stock Exchange tend to provide higher earnings quality than other firms in the CEEplus index. In the tested sample, there was a noticeable domination of managerial practices aimed at managing the earnings downward. This also happened in 2020, the period negatively affected by the SARS-CoV-2 pandemic.
Originality/value
This study fills a gap in the literature regarding the quality of accounting data reported among listed companies from Central and Eastern Europe (CEE) countries that are characterized by high liquidity of shares.