Computer Science
3 years ago

Corporate Social Responsibility Boosts Transparency, Deters Earnings Manipulation in Industry

Journal of Tourism and Leisure Research
The Effect of Corporate Social Responsibility Activities on Accrual Quality, Real Earnings Managements: Focused on Listed Companies in the Hotel, Restaurant and Leisure Industry
Ji-Oen Shin, Chol-Shik Won

Paper Summary

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Corporate social responsibility (CSR) activities can impact how transparent a company's accounting practices are. In this study, CSR activities were analyzed to see how they affect accrual quality (AQ) and real earnings management (REM). The results show that companies with more REM activities tend to have lower AQ, which can be a short-term way to boost financial performance or reputation. While CSR activities may reduce the likelihood of profit adjustments, the impact on cash and discretionary expenses is minimal. The findings also differ from previous studies focused on the manufacturing industry.