EARNINGS MANAGEMENT AND ABNORMAL RETURN: DO THE BRAZILIAN MARKET REACT TO EARNINGS MANAGEMENT?
The present article aims to verify if the Brazilian market reacts differently to the companies that do earnings management with the objective of reducing the variability of their results. The hypothesis: “companies with lower variability receive different incentives from the other companies” was rejected, in other words, the average cumulative abnormal return of the group of companies classified as "Managers" was statistically equal to the average cumulative abnormal return of the group of companies classified as "Unmanagers". The statistical test Mann-Whitney was used to compare the average of the both groups. There were no significant differences in any of the tests, in other words, the average of the “Managers” and the “Unmanagers”, of the following economic sectors: Steel Industry and Metallurgy and Telecommunications, can be considered statistically identical, with the significance level at 5%.
Earnings Management, Abnormal Return, Event Study
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Revista de Contabilidade e Controladoria. ISSN: 1984-6266