Corporate social responsibility and earnings management in U.S. banks


Business decision making depends on financial reporting quality. In identifying the drivers of financial reporting quality, proxied by earnings management (EM), prior literature has drawn attention to the association between corporate EM practices and commitment to corporate social responsibility (CSR). Empirical evidence, however, provides inconclusive results regarding the direction of this association. Using simultaneous equations, we examine the bi-directional CSR-EM relationship in U.S. commercial banks. We demonstrate that, although banks that engage in EM practices are also actively involved in CSR, the reverse relationship is not significant. We provide implications for investors, analysts, business participants and regulators.

Publication DOI:
Divisions: College of Business and Social Sciences > Aston Business School > Accounting
College of Business and Social Sciences > Aston Business School
Additional Information: © 2014, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Funding: European Union, Seventh Framework Programme (FP7-REGPOT-2012-2013-1) under Grant Agreement No. 316167.
Uncontrolled Keywords: banking institutions,corporate social responsibility,earnings management,ethics,Accounting,Finance
Publication ISSN: 1467-6303
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Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2014-09
Published Online Date: 2014-06-14
Authors: Grougiou, Vassiliki
Leventis, Stergios
Dedoulis, Emmanouil
Owusu-Ansah, Stephen

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