Abstract
This study investigates Earnings Management practices, through the use of Loan LossProvisions, among European banks to establish whether they take place to improve and/orsmooth out earnings and also to establish whether Directive 2014/56/EU affected such practices.Directive 2014/56/EU aimed to strengthen the independence and effectiveness of audits inorder to improve the quality of financial statements and thus reinforce investor protection. Thisstudy also investigates the impact of corruption on Earnings Management. The results confirmthat banks in Europe engaged in Earnings Management both to improve and to smooth outearnings. Moreover, discretionary Loan Loss provisions were reduced after implementationof the Directive and were lower in low corruption countries. Another interesting finding, is thatoverall provisions were higher in high corruption countries, indicating the higher risk of loans inthose countries due to the laxed lending practices. The results of this study should be of interestto regulators, the banking industry, investors and academics.
| Original language | English |
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| Title of host publication | International Conference of Economies of the Balkan and Eastern European Countries EBEEC |
| Editors | Anastasios Karasavvoglou, Niccolò Persiani, Persefoni Polychronidou |
| Place of Publication | Florence, Italy |
| Publisher | International Hellenic University |
| ISBN (Print) | 978-618-5036-90-4 |
| Publication status | Published - 22 May 2022 |
| Event | 14th International Conference of Economies of the Balkan and Eastern European Countries (EBEEC) - Florence, Italy Duration: 20 May 2022 → 22 May 2022 http://ebeec.ihu.gr/index.php/past-conferences/ebeec-2022 |
Conference
| Conference | 14th International Conference of Economies of the Balkan and Eastern European Countries (EBEEC) |
|---|---|
| Abbreviated title | EBEEC 2022 |
| Country/Territory | Italy |
| City | Florence |
| Period | 20/05/22 → 22/05/22 |
| Internet address |