Do culture and religion mitigate earnings management? Evidence from a cross-country analysis

Jeffrey L. Callen, Mindy Morel, Grant Richardson

Research output: Contribution to journalArticle

43 Citations (Scopus)

Abstract

This study investigates whether culture in general and religion in particular mitigate earnings management. Using a cross-country data set, empirical tests based on rank regressions indicate that earnings management is unrelated to both religious affiliation and the degree of religiosity. In contrast, earnings management is found to be negatively related to the updated Hofstede cultural variable of individualism and positively related to uncertainty avoidance. The results also indicate that the positive impact of the legal environment in mitigating earnings management, documented by Leuz, can no longer be demonstrated after controlling for culture.

Original languageEnglish
Pages (from-to)103-121
Number of pages19
JournalInternational Journal of Disclosure and Governance
Volume8
Issue number2
DOIs
Publication statusPublished - 1 May 2011
Externally publishedYes

Keywords

  • cross-country study
  • culture
  • earnings management
  • religion

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