Journal of Business Ethics 161 (1):71-90 (2020)

Previous studies argue that religious firms are more ethical and thus engage less in accrual earnings management. At odds with the ethical view, we use a sample of Chinese listed firms and show that firms in religious regions use more real earnings management. We postulate that besides ethics, religion also proxies for risk aversion, which motivates firms to substitute accrual earnings management with real earnings management. Consistent with this view, we show that the positive association between religiosity and real earnings management is more pronounced for firms with lower litigation risk and for firms with less reputable auditors. In addition, we use a mediation model introduced by Baron and Kenny :1173–1182, 1986) to show that religiosity affects earnings management through the channel of risk aversion. We conclude that firms choose real earnings management over accrual-based earnings management because of risk aversion, rather than ethical reasons.
Keywords No keywords specified (fix it)
Categories (categorize this paper)
DOI 10.1007/s10551-018-3971-6
Edit this record
Mark as duplicate
Export citation
Find it on Scholar
Request removal from index
Translate to english
Revision history

Download options

PhilArchive copy

Upload a copy of this paper     Check publisher's policy     Papers currently archived: 72,564
External links

Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
Through your library

References found in this work BETA

No references found.

Add more references

Citations of this work BETA

Add more citations

Similar books and articles

Audit Committee Features and Earnings Management: Further Evidence From Singapore.J.-L. W. Mitchell Der Zahvann & Greg Tower - 2004 - International Journal of Business Governance and Ethics 1 (s 2-3):233-258.
Executive Compensation and Earnings Persistence.Allan S. Ashley & Simon S. M. Yang - 2004 - Journal of Business Ethics 50 (4):369-382.
Determinants of Earnings Management Ethics Among Accountants.Rafik Z. Elias - 2002 - Journal of Business Ethics 40 (1):33 - 45.


Added to PP index

Total views
7 ( #1,075,114 of 2,533,568 )

Recent downloads (6 months)
1 ( #390,861 of 2,533,568 )

How can I increase my downloads?


My notes