investigate whether the mandatory from Belgium, Denmark, Finland, accrual-based earnings adoption of IFRS from 1 January Italy, Sweden and The management as well as real 2005 by all listed companies in the Netherlands he compares the earnings management has strictly European Union led to significantly pre-IFRS period from 2000-2004 increased after the adoption of lower levels of earnings with the post-IFRS period IFRS. Some additional tests showed management in six of those EU extending from 2005 through that there is a substitution effect countries. 2006. A total number of almost between accruals based earnings 1200 firm year observations are management and real earnings used in the analyses management despite the growing rate of both types.
investigate whether the mandatory adoption of IFRS from 1 January 2005 by all listed companies in the European Union led to significantly lower levels of earnings management in six of those EU countries. from Belgium, Denmark, Finland, Italy, Sweden and The Netherlands he compares the pre-IFRS period from 2000-2004 with the post-IFRS period extending from 2005 through 2006. A total number of almost 1200 firm year observations are used in the analyses accrual-based earnings management as well as real earnings management has strictly increased after the adoption of IFRS. Some additional tests showed that there is a substitution effect between accruals based earnings management and real earnings management despite the growing rate of both types.