Purpose – The goal of this study was to investigate the relationship between the level of Earnings Opacity and a company’s informational environment, specifically considering accounting standards and the legal origins of the system.
Design/methodology/approach – The sample consisted of publicly traded companies from 20 countries classified as emerging, based on agency Standard & Poor’s index. The sample included data from 2004 to 2013. In order to compare the indicators among the group of countries, taking into account their institutional characteristics, the Mann-Whitney test and the Kruskal-Wallis test were performed.
Findings – The assessment of the informational environment measures’ behavior in emerging countries revealed that these measures were correlated, suggesting that, despite different behaviors, opacity proxies share information. The fact that earnings opacity was lower in countries that had already adopted international standards during the analyzed period was also observed. In the same sense, a higher level of income smoothing was detected in countries of French code law origins.
Originality/value – This article contributes to the understanding of the relationship between the characteristics of an accounting informational environment and the levels of opacity of the information emitted by accounting. Thus, this article has helped managers, investors and regulators to understand users’ needs and how country-specific characteristics change their perspectives.
If a paper is approved for publication, its copyright has to be transferred by the author(s) to the Review of Business Management – RBGN.
Accordingly, authors are REQUIRED to send RBGN a duly completed and signed Copyright Transfer Form. Please refer to the following template: [Copyright Transfer]
The conditions set out by the Copyright Transfer Form state that the Review of Business Management – RBGN owns, free of charge and permanently, the copyright of the papers it publishes. Although the authors are required to sign the Copyright Transfer Form, RBGN allows authors to hold and use their own copyright without restrictions.
The texts published by RBGN are the sole responsibility of their authors.
The review has adopted the CC-BY Creative Commons Attribution 4.0 allowing redistribution and reuse of papers on condition that the authorship is properly credited.