Beatriz Garcia Osma

University Carlos III de Madrid | UC3M · Department of Business Administration

We examine if quarterly earnings guidance induces real earnings management. Quarterly guidance may cause myopia and inefficient decision-making, if managers become overly concerned with setting and beating short-term earnings targets. We test these associations on a large sample of U.S. firms. Our evidence suggests that quarterly guidance is inform...

We examine an unexplored side of management control systems (MCS): their links with real earnings management. We propose that interactive use of MCS supports management in identifying, evaluating, selecting, and implementing real actions that conceptually would be classified as real earnings management (REM). Interactive MCS use is predicted to enh...

This work focuses on analysing compliance with information transparency requirements of Public Oversight Bodies for Statutory Auditors (POBSA), set out in Directive 2006/43/EC , Directive 2014/56/EU amending the previous Directive 2006/43/EC and the Regulation (EU) No. 537/2014 on specific requirements for the statutory audit of public-interest ent...

Despite the predominance of cash-flow based methods in business valuation, other theoretically sound methods may also be applied to valuation, leading to accurate estimates of firm value. In this article, we first reflect on the key steps to value a business. After briefly reviewing widely used valuation models, we present an accounting-based model...

Employing Lennox’s (2000) methodology on a uniquely long time series of Spanish companies’ data, we find evidence of successful audit opinion-shopping through the firm switching decision. However, in contrast to Chen et al. (2016) in the Chinese setting, we find no evidence of successful opinion-shopping at the partner level. This supports the thes...

We define accounting engagement as stakeholders’ actions taken with the intention of influencing corporate reporting. Using this definition, we review the literature on such activism and discuss avenues for research. The evidence reviewed suggests accounting engagement is rare. We reflect on the reasons of this, given evidence on increasing overt e...

We examine insider trading profitability and common identity between insiders and top executives. In particular, we argue that common gender and the resultant social connections it creates influence access to private information, where insiders benefit from greater information sharing with top executives of the same gender. Using a large sample of...

Revista 133 aeca 43 Tribuna de opinión El año 2020 se cierra con un escándalo contable que hace tem-blar los cimientos de la supervisión pública de la profesión de auditoría en Europa. El caso Wirecard en Alemania siembra dudas sobre la calidad de la auditoría, pero fundamentalmen-te, revela potenciales déficits de coordinación y capacidad de respu...

We examine how investment professionals assess the usefulness of financial accounting information depending on their information acquisition objectives and preparers' earnings management incentives. We conduct a survey experiment based on face-to-face interviews with investment professionals and document two main results. First, we find that, compa...

We examine how investment professionals assess the usefulness of financial accounting information depending on their information acquisition objectives and preparers’ earnings management incentives. We conduct a survey experiment based on face-to-face interviews with investment professionals and document two main results. First, we find that, compa...

While multiple causes underpin accounting scandals such as Wirecard, they often point at deficiencies in the audit profession and its oversight. Currently, the system of national public audit oversight boards (POBSAs) is fragmented and overly complex, characterized by limited responsiveness to red flags, and apparent lack of communication among the...

We examine the impact of conditional conservatism on earnings management. Our findings support the view that conditional conservatism reduces accruals-based earnings management but also triggers a trade-off between accruals and real earnings management. In our main tests we use the passage of SFAS 121 as a plausibly exogenous regulatory change that...

We examine the effect of employee quality development on investment efficiency. Employees at all levels of an organization, as well as the corporate executives, may play a significant role for efficient corporate investment. Thus, human capital development efforts that improve employee quality should be associated with efficient corporate investmen...

We study whether firms that voluntarily restrict insider trading have lower incentives for earnings management. Using a large sample of US firms, we measure these restrictions based on the extent to which insider transactions happen shortly after quarterly earnings announcements. We find that the adoption of insider trading restrictions is associat...

We predict that accounting conservatism influences insiders' opportunities to speculate on good and bad news, and thus, insider trading profitability. We find that greater conditional (unconditional) conservatism is associated with lower (higher) insiders' profitability from sales. We find limited evidence that conservatism influences profitability...

Building on legitimacy theory and prior work on stakeholder management, we study firm Corporate Social Responsibility (CSR) communication in social media. In particular, we analyze the content of over a million microblogs on Twitter relating to CSR in the banking industry. We focus on key issues considered by banks in their CSR reports, which we cl...

El uso del valor razonable en los estados financieros de las empresas es un tema de continuo debate tanto en el mundo académico como en el profesional. En este trabajo nos planteamos los siguientes objetivos: (i) analizar la evolución de los objetivos, las prioridades y los enfoques de las normas contables; (ii) identificar los antecedentes más pró...

We investigate the role of prudential supervisors’ independence in affecting income smoothing behavior in European banks. Powerful national supervisors are predicted to influence the accounting practices of their supervised entities, shaping the properties of the accounting numbers they prepare. In particular, we study whether greater independence...

Prior literature studying railway accounting during the nineteenth and twentieth centuries defends the thesis of lack of reliability of accounting figures. This prior research, which mainly studies the cases of the United Kingdom and the United States, offers mixed views on the causes, or simply accepts this thesis without providing conclusive evid...

We provide a comparative overview of the process of implementation, harmonization and stabilization of public oversight systems for statutory auditors across the European Union (EU) after Directive 2006/43/EC. We build on institutional change theory to identify potential determinants as to why some countries still lag in this harmonization process....

We study if debt pressure drives the use of interactive management accounting and control systems (MACS) and its consequences. We build on and argue that financing pressures can threaten strategic investment. To alleviate debt pressures and reduce information asymmetries with lenders, managers are predicted to increase the interactive use of MACS....

Recent research in accounting suggests female directors exert more stringent monitoring over the financial reporting process than their male counterparts. However, an emerging literature in finance and economics provides mixed findings and questions whether females in leadership roles significantly differ from their male counterparts. Building on t...

Purpose – The purpose of this paper is to contribute to the development of the theoretical framework for corporate social responsibility (CSR) and to provide a number of conceptual considerations which can be considered in the design of measures for corporate social performance (CSP). Design/methodology/approach – This study develops a theoretic...

We study if debt pressure drives the choice of interactive control systems and its consequences. Simons (1990) argues that interactive use is determined by strategic uncertainties faced by top managers. We predict that financing pressures can threaten managerial vision by imposing constraints on firm strategic investment. This is particularly true...

Recent research in accounting suggests female directors exert more stringent monitoring over the financial reporting process than their male counterparts. However, an emerging literature in finance and economics questions whether females in leadership roles significantly differ from their male counterparts. Building on this literature, we re-examin...

Conservatism, through the timelier recognition of losses in the income statement, is expected to increase firm investment efficiency through three main channels: (1) by decreasing the adverse effect of information asymmetries between outside equity holders and managers, facilitating the monitoring of managerial investment decisions; (2) by increasi...

Resumen: Existe un creciente interés por la Responsabilidad Social Corporativa (RSC), pero si bien es cierto que son muchos los organismos, trabajos y estudios que se han interesado por este tema, no se puede encubrir que en algunos ámbitos existe escepticismo sobre su aplicación. Por ello y a través de este trabajo se quiere contribuir a mostrar s...

We provide a comparative overview of the process of implementation, harmonization and stabilization of public oversight systems for statutory auditors across the European Union (EU) after Directive 2006/43/EC. We build on institutional change theory to identify potential determinants as to why some countries still lag in this harmonization process....

We review the academic literature on the use of financial reporting information by capital providers. We classify our findings by investor type and by information objective. While most capital providers use accounting information, our survey indicates that they do so in a variety of ways with financial reporting information competing with other sou...

We study the information consequences of conservatism in accounting. Prior research shows that information asymmetries in capital markets lead to firm-level increases in conservatism. In this paper, we further argue that increases in conservatism improve the firm information environment and lead to subsequent decreases in information asymmetries be...

We review the academic literature on the use of financial reporting information by capital providers. We classify our findings by investor type and by information objective. While most capital providers use accounting information, our survey indicates that they do so in a variety of ways with financial reporting information competing with other sou...

An untested common assumption in prior literature is that conservatism limits the opportunities for successful accruals-based earnings management. We test this prediction and also, whether by imposing limits to accruals manipulation, there is a downside to conservatism in the form of increases in real earnings management. If the incentives to engag...

This paper examines managerial, self-serving, disclosure practices in the headlines of press releases announcing annual results. Headlines are a framing feature that can be used to capture and retain attention with the ultimate intention of affecting the thoughts and feelings of readers, influencing their opinions. Therefore, headlines have a key r...

We study the information consequences of conservatism in accounting for financial analysts, debtholders and stockholders. We expect conservatism to improve the firm information environment by ameliorating information asymmetry problems, reducing uncertainty about the firm information structure, and facilitating the assessment of future earnings and...

We study the consequences of mandatory adoption of International Financial Reporting Standards for earnings quality. On transitioning from local GAAP to IFRS, firms can make strategic balance sheet adjustments that in turn affect future reported earnings. We predict that earnings quality after IFRS adoption depends on the measurement and recognitio...

We study the association between corporate governance and impression management in annual results press releases (ARPRs). Press releases constitute a timely vehicle to communicate firm performance to third parties. However, oftentimes, managers provide self-serving disclosures that attempt to distort readers� perceptions of corporate achievements....

Prior literature argues that managers make opportunistic income-decreasing accounting choices to limit the concessions made to trade unions. However, empirical research to date presents mixed evidence, potentially due to the theoretical approach common in prior work that views labor bargaining as a one-shot game in nature. Using a sample of US firm...

We empirically test the association between conditional conservatism and cost of equity capital. Conditional conservatism imposes stronger verification requirements for the recognition of economic gains than economic losses, resulting in earnings that reflect losses faster than gains. This asymmetric reporting of gains and losses is predicted to lo...

Conservatism is expected (1) to improve the monitoring process over managerial investment decisions, decreasing investment in settings where managers are likely to over-invest, and (2) to facilitate the access to external financing at lower cost, increasing investment in settings where managers are likely to under-invest. We find that more conserva...

We study accounting choice around firm-level collective agreement negotiations. Prior literature argues that managers make income-decreasing accounting choices to limit the concessions made to trade unions. However, empirical research to date fails to find evidence in support of this hypothesis. We expect that this lack of evidence is driven by the...

The use of fair value measurement in accounting has been recently called into question due to the advent of a major international fi nancial crisis. In this paper, we review the background and recent developments in fair value measurement for fi nancial instruments, which can be traced back to four decisions made by the FASB in 1996. We discuss the...

This paper examines whether firms cut R&D spending in response to short-term earnings pressures and how equity markets interpret such behaviour. Failure to report positive earnings and earnings growth increases the probability of a subsequent cut in R&D spending, while pressure to report positive earnings and earnings growth in the current period l...

We study the economic determinants of conditional conservatism. Consistent with prior literature, we find that contracting induces only conditional conservatism and litigation induces both conditional and unconditional conservatism. We extend prior evidence by Qiang (2007) by showing that taxation and regulation induce not only unconditional conser...

We predict that firms with stronger corporate governance will exhibit a higher degree of accounting conservatism. Governance level is assessed using a composite measure that incorporates several internal and external characteristics. Consistent with our prediction, strong governance firms show significantly higher levels of conditional accounting c...

This paper discusses celebrity participation in social marketing programs focusing on public health, especially on HIV programs. The research identifies the inhibitions of celebrity people and implications that this involvement may have upon their lives. The paper analysis data from in-depth interviews made to twenty-seven Portuguese celebrities fr...

This paper analyses earnings quality in ex-post failed firms. Using a large sample of UK bankrupt firms, we find that failed firms manage earnings upwards in the four years prior to failure. This manipulation is achieved in two ways: (1) through accounting (accruals) manipulation, and (2) by implementing real operating actions that deviate from nor...

Este artículo revisa las metodologías utilizadas en la literatura contable previa para identificar y medir la existencia de estrategias de presentación oportunista de información financiera. En total, cuatro técnicas de análisis de contenido son estudiadas usando notas de prensa de empresas españolas cotizadas en la Bolsa de Madrid en el año 2000....

Manuscript Type: Empirical Research Question/Issue: This paper analyzes the role of boards of directors in constraining research and development (R&D) spending manipulation. Extant research on earnings management indicates that independent directors reduce accounting accruals manipulation; however, there is little evidence on their effectiveness in...

Using a sample of Spanish listed firms for the period 1997–2002 we find that firms where the CEO has a low influence over the functioning of the board of directors show a greater degree of accounting conservatism. We measure the influence of the CEO over the board of directors using two aggregate indexes combining six (eight) characteristics of the...

We test whether corporate governance mechanisms promoted by best practice codes are effective in constraining earnings manipulation for a Spanish sample of quoted companies during the period 1999-2001. In particular, we analyse the association between earnings management and two key aspects of corporate governance: board composition and the existen...

We test whether corporate governance mechanisms promoted by best practice codes are effective in constraining earnings manipulation for a Spanish sample of quoted companies during the period 1999-2001. In particular, we analyse the association between earnings management and two key aspects of corporate governance: board composition and the existen...

Data availability is one of the traditional obstacles confronting researchers carrying out international empirical studies in accounting. In recent years several databases have claimed to offer comprehensive coverage of accounting and financial data of firms worldwide. We analyse whether the choice of database has an effect on the results of empiri...

La escasa disponibilidad de datos con los que llevar a cabo estudios empíricos es uno de los problemas que tradicionalmente han sufrido los investigadores en el área de contabilidad y finanzas corporativas. Sin embargo, en los últimos años han aparecido dversas bases de datos que ofrecen información contable y financiera sobre empresas de todo el m...

One of the problems faced by researchers to undertake empirical accounting studies in Spain has been that data were difficult to obtain. However, in recent years several databases, offering what they claim to be comprehensive worldwide accounting and financial data, have appeared. In this study we analyse whether database choice affects the results...

Abstract:  Is earnings management affecting (driving) the measures of earnings conservatism? Ball et al. (2000) point out that the asymmetry in the recognition of good and bad news in earnings (faster recognition of bad news: earnings conservatism) is more pronounced in common-law than in code-law based accounting regimes. However, comparative stud...

El objetivo de este trabajo es analizar la relación entre las prácticas de gobierno corporativo de las empresas españolas y su propensión a llevar a cabo prácticas manipuladoras del resultado. Para ello, se utiliza la información de 155 respuestas al cuestionario que la CNMV remitió a las empresas cotizadas para que voluntariamente ofreciesen infor...

Este trabajo ofrece una panorámica de la investigación sobre earnings management con el fin de poner de manifiesto el esfuerzo realizado hasta la fecha, así como señalar las perspectivas que se vislumbran dentro de esta línea de investigación. En primer lugar, se perfila el concepto de earnings manayement. En segundo lugar, se detallan las principa...

We test whether corporate governance mechanisms promoted by best practice codes are effective in constraining earnings manipulation in Spain, as previously documented in the US and the UK. We show that to a certain extent an Anglo-Saxon model of corporate governance may turn out to be a failure when used in a different institutional setting. In thi...

Este trabajo ha sido seleccionado y ha obtenido el Accésit Premio Estudios Financieros 2004 en la Modalidad de contabilidad y administración de empresas. La separación entre la propiedad y el control de la empresa genera asimetrías entre los intereses de accionistas y gerentes que pueden dan lugar a prácticas manipuladoras del resultado por parte d...

El objetivo de este trabajo es analizar las diferencias internacionales en el nivel de conservadurismo contable, excluyendo el efecto de la manipulación del beneficio en tres países europeos, Francia, Alemania y Reino Unido. Estos países representan regímenes contables distintos y cuentan con diferencias institucionales determinantes, tanto en la m...

This paper studies the comparability between US GAAP and International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) by looking at the Form 20-F reconciliation adjustments to US GAAP made by firms using IASs in the period from 1995 to 2001. Adjustments have been classified in categories to identify the characteristics...

La separación entre la propiedad y el control de la empresa genera asime-trías entre los intereses de gerentes y accionistas, dando lugar a prácticas gerenciales ineficientes o interesadas. En línea con otras iniciativas inter-nacionales que tratan de ofrecer garantías y directrices que posibiliten la gestión eficaz de las organizaciones empresaria...

We test whether corporate governance mechanisms promoted by best practice codes are effective in constraining earnings manipulation in Spain, as previously documented in the US and the UK. We show that to a certain extent an Anglo-Saxon model of corporate governance may turn out to be a failure when used in a different institutional setting. In thi...