Portal de Periódicos da CAPES

Earnings management in Brazilian credit unions

2013; Volume: 10; Issue: 4 Linguagem: Inglês

10.15728/bbr.2013.10.4.4

1808-2386

Saulo Cardoso Maia, Valéria Gama Fully Bressan, Wagner Moura Lamounier, Marcelo José Braga,

Financial Reporting and Valuation Research

This article investigates the practice of earnings management by Brazilian credit unions. The main focus is to check for the existence of earnings management to meet the capital adequacy requirements imposedby the Brazilian Central Bank, in line with the Basel Accords. The study also examines the occurrence of income smoothing across credit unions as well as earnings management to avoid reporting losses. The results indicate that the studied institutions do not manage their earnings towards regulatory capital adequacy, but they do engage in income smoothing and earnings management to avoid reporting losses.