Title: Earnings management under Polish GAAP versus IFRS: evidence from an emerging market

Authors: Konrad Grabinski; Alina Beattrice Vladu

Addresses: Cracow University of Economics, Rakowicka 27, 31-510 Krakow, Poland ' Babes-Bolyai University, 58-60 TeodorMihali, St., Cluj-Napoca, Romania

Abstract: Our empirical paper examines the impact of IFRS on the quality of accounting information within Polish accounting setting, addressing the question whether IFRS implementation is associated with lower earnings management compared to domestic GAAPs. Using a sample of non-financial companies listed in the Warsaw Stock Exchange for a period of nine years (2005 to 2013), we document a positive impact of IFRS in curbing earnings management as measured by discretionary accruals. Our findings contribute to the debate whether IFRS are sufficient to override managers' incentives to manipulate earnings compared to local GAAPs in emerging countries with weak investor protection rights. Limits of the research conducted and potential directions of future research are also approached.

Keywords: accrual-based earnings management; IFRS implementation; International Financial Reporting Standards; financial markets; earnings quality; GAAP; emerging markets; Poland; information quality; accounting information; discretionary accruals; investor protection rights; weak protection rights.

DOI: 10.1504/AJAAF.2015.075121

African Journal of Accounting, Auditing and Finance, 2015 Vol.4 No.4, pp.294 - 311

Available online: 03 Mar 2016 *

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