Title: An investigation of the impact of financial reporting standards on the quality of accounting knowledge: a sample study from Turkey

Authors: Cennet Gürbüz; İsmail Bekci; Eda Oruç Erdoğan

Addresses: Ministry of National Education, Isparta, Turkey ' Department of Business Administration, Faculty of Economics and Administrative Sciences, Süleyman Demirel University, Isparta, Turkey ' Department of Business Administration, Faculty of Economics and Administrative Sciences, Akdeniz University, Antalya, Turkey

Abstract: This research focuses on the changes in earnings management practices of manufacturing industry companies traded on Borsa Istanbul with the implementation of Turkish Financial Reporting Standards (TFRS) and Turkish Accounting Standards (TMS). Real earnings management and accrual-based earnings management are examined to reveal the effects of standards on the quality of accounting knowledge. In the study, panel data analysis is applied by considering the year 2005 in the separation of the periods pre- and post-TMS-TFRS. The findings point to an increase in accrual-based earnings management in the post-TMS-TFRS period. It has been determined that there has been an increase in the quality of accounting knowledge with the decrease in real earnings management practices in the post-TMS-TFRS period. The results regarding the substitutability of earnings methods show that there is a substitution between the two methods in the pre-TMS-TFRS period, but the methods complement each other after TMS-TFRS.

Keywords: TMS-TFRS; accounting knowledge quality; earnings management; accrual-based earnings management; AEM; real earnings management; REM; Turkey.

DOI: 10.1504/IJMFA.2024.139529

International Journal of Managerial and Financial Accounting, 2024 Vol.16 No.3, pp.312 - 329

Received: 16 Sep 2022
Accepted: 22 Dec 2022
Published online: 03 Jul 2024 *

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