A Critical Analysis of Literature on Earnings Management Control Mechanism
Keywords:
Accounting standards, Audit quality, Corporate governance, Earnings managementAbstract
This paper critically analyses the literatures on earnings management control mechanisms. Earnings management control mechanism are broadly divided in to corporate governance, audit quality and accounting standards. Literatures on various factors under each category have been analysed extensively to understand the effects of these factors on earnings management. It is found from the literatures that corporate governance factors are most effective earnings management control mechanisms and audit quality also helps to control earnings management. The other major conclusion from the literature is that the accounting standards are not effective and adoption of IFRS has further deteriorated earnings quality.
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