Disclosure of financial information during the pandemic: sectors analysis on B3

ID: 77825

Authors: Karinne Custódio Lemos Suavinha, Gilberto José Miranda.

Source: Contabilidade Vista & Revista, v. 35, n. 3, p. 1-24, September-December, 2024. 24 page(s).

Keyword: Compliance , COVID-19 , Explanatory Notes , Readability , Size

Document type: Article (Portuguese) Show Abstract

This study assessed the relevant information disclosure to operational continuity in explanatory notes during the crisis caused by the COVID-19 pandemic, in light of the Disclosure Theory. The sample consisted of 39 companies listed on B3, belonging to the sectors of Agriculture and Cattle Raising, Clothing, Textiles and Accessories, and Electric Energy. The 2020 financial statements were analyzed, considering the length of the explanatory notes (number of words), readability (Flesch index) and compliance with the Brazilian Securities and Exchange Commission (CVM) recommendations, through content analysis. The results indicated that companies most negatively impacted by the crisis tend to disclose information in greater quantity, with greater readability and in compliance with legal requirements. These findings are in line with the disclosure theory, which postulates that companies evaluate the cost-benefit of disclosure considering the stakeholders’ expectation regarding the information provided. In times of crisis, managers attribute greater usefulness and relevance to the information disclosed when companies are negatively affected.

Palavras do Editor

ID: 77824

Authors: Samuel de Oliveira Durso.

Source: Contabilidade Vista & Revista, v. 35, n. 3, p. 1-2, September-December, 2024. 2 page(s).

Document type: Editorial (Portuguese)

Value Relevance of provisions and contingent liabilities in Brazilian companies

ID: 77826

Authors: Rafael Bertoldi Pescador, Suliani Rover.

Source: Contabilidade Vista & Revista, v. 35, n. 3, p. 25-52, September-December, 2024. 28 page(s).

Keyword: Contingent liabilities , CPC 25 , Provisions , Relevance

Document type: Article (Portuguese) Show Abstract

The present research analyzed the accounting relevance, from the perspective of value relevance, of the recognition of provisions and disclosure of contingent liabilities of a possible nature in Brazilian companies, in order to verify if the different form of disclosure impacts on the price company's market. The data were mainly extracted from the Standardized Financial Statements of the companies object of the sample, listed in the Brazil 100 Index of B3, in the period 2010 to 2020, which resulted in a total of 95 companies and 927 observations. The analysis occurs through regressions by OLS and GLS, based on a relevance model of Ohlson (1995) adapted by Collins et al. (1997). Among the results is that provisions have a significant – and negative – association with the market value of Brazilian companies. It was found that the recognition of a provision unit tends to reflect negatively on the market price of the share, in an amount of approximately four units. This finding may be related to the low conservatism of Brazilian companies from an accounting point of view, the constant reclassification of contingent obligations and the uncertainty regarding the magnitude of future disbursements, facts that sensitize the user's perception regarding the potential undervaluation in the recognition of provisions and amplify the effect on the market value of those that have been recognised. On the other hand, the coefficients of contingent liabilities were not statistically significant, which indicates a difference in perception between provisions and contingent liabilities by users, as the latter are subject to lower auditing standards.

Financial constraints and earnings management: a study across different Brazilian economic scenarios

ID: 77827

Authors: Marcela Caroline Sibim Barbosa, Marcos Wagner da Fonseca.

Source: Contabilidade Vista & Revista, v. 35, n. 3, p. 53-86, September-December, 2024. 34 page(s).

Keyword: Earnings Management , Economic Scenarios , Financial Constraints

Document type: Article (Portuguese) Show Abstract

The objective of this research was to analyze the relationship between financial constraints and earnings management, in the face of different economic scenarios. The sample of 194 companies comprised companies listed on [B]3 in the period from 2010 to 2020. The economic scenarios are represented by the variables economic crises, exchange rate and interest rate. Discretionary accruals were estimated using the Kothari, Leone and Wasley (2005) model. The results indicated a significant relationship at 1% between financial constraints and discretionary accruals, but the signal did not meet the expected relationship that financially constrained companies manage their results more. With regard to moderation, economic crises are positive and significant. On the other hand, the exchange rate negatively moderates the relationship between companies with restrictions and earnings management. Finally, the moderation of the interest rate did not show statistical significance.

Relationship between the corporate sustainability index and the earnings response coefficient

ID: 77828

Authors: Lauren Dal Bem Venturini, Leonardo Flach.

Source: Contabilidade Vista & Revista, v. 35, n. 3, p. 87-114, September-December, 2024. 28 page(s).

Keyword: Corporate Sustainability Index (ISE) , Earnings Response Coefficient (ERC) , Stock Price Informativeness

Document type: Article (Portuguese) Show Abstract

This study analyzes the relationship between the Corporate Sustainability Index (ISE) and the Earnings Response Coefficient (ERC) of non-financial companies listed on B3 S.A. – Brasil, Bolsa, Balcão, from 2011 to 2019. The sample comprises 215 companies, with data obtained from the Economatica® database. Using robust multiple ordinary least squares (OLS) regression and quantile regression, the results indicate an association between the ISE and the prospect of unexpected future earnings (ERC). Thus, actions undertaken by companies to meet corporate sustainability requirements are perceived positively by investors. Additionally, in the analyzed context, other determinants of the ERC were identified: company size, earnings persistence, and short-term leverage. However, no moderating effect of the ISE on the ERC was observed when the entity exhibited earnings persistence. This may suggest that socio-environmental practices and earnings persistence are evaluated independently as indicators of future performance, considering that each investor may adopt different criteria and perspectives regarding the value of sustainability practices. Therefore, this research contributes to the accounting literature in emerging markets by demonstrating that data related to corporate sustainability provide relevant information for future earnings expectations, potentially enhancing investors' company valuation processes. Furthermore, it highlights that managers should consider that investments in sustainable practices generate positive expectations of future earnings among investors. Finally, peers can use companies listed on sustainability indices as benchmarks to drive and/or implement sustainable actions.

Association Between Earnings Management And M&A Conducted By Companies Acquiring B3

ID: 77829

Authors: Silvio Silva Miranda Filho, Juliana Ferreira de Carvalho, Ilirio José Rech, Carlos Henrique Silva do Carmo.

Source: Contabilidade Vista & Revista, v. 35, n. 3, p. 115-140, September-December, 2024. 26 page(s).

Keyword: Accruals , M&A , Operational , Results Management

Document type: Article (Portuguese) Show Abstract

Earnings Management (EG) is a consequence of discretionary actions by managers when manipulating accounting information in order to change the perception of the company's real economic-financial performance. In this way, it becomes relevant to continue research on this topic in order to offer answers that provide additional evidence regarding this corporate phenomenon, especially when it involves scenarios of corporate strategies carried out in Mergers and Acquisitions (M&A) processes, therefore, this research sought to identify evidence of GR prior to M&A in acquiring Brazilian companies listed on B3. Data were collected at Refinitiv Eikon and EG was estimated using discretionary accruals (Pae Model) and operational activities (Roychowdhury Model). For that, multiple linear regressions operationalized in Stata® were used. The main results pointed to evidence that acquiring companies raised the level of EG by accruals and reduced the EG by real activities one year before the announcement of the M&A. There was an association between changes in stock prices in the period prior to the announcement of the M&A, a crucial point for M&A operators and investors, both in terms of influence on changes in stock prices in the capital market, and in the informational asymmetry of decisions and consequences involved in the process. That said, there was evidence of conflicts of interest between managers and business objectives present in M&A. In this sense, these results help educators and standard setters by highlighting part of the opportunistic behavior of managers in the face of M&A.

Book-Tax Conformity And Earnings Persistence: Moderating Effects Of Earnings Management And Tax Aggressiveness

ID: 77830

Authors: Guilherme Otávio Monteiro Guimarães, Marcelo Alvaro da Silva Macedo.

Source: Contabilidade Vista & Revista, v. 35, n. 3, p. 141-166, September-December, 2024. 26 page(s).

Keyword: Book-tax conformity , Discretionary Practices , Earnings Persistence

Document type: Article (Portuguese) Show Abstract

The present study aims to analyze the moderating effect of earnings management (EM) and tax aggressiveness (TAG) of companies on the relationship between Book-Tax Conformity (BTC) an earnings persistence. To achieve this objective, the investigation seeks to understand how average levels of EM and TAG may impact the association between BTC and earnings persistence. The study employed the multiple regression technique, utilizing a dataset comprising non-financial companies across 35 countries during the period from 2010 to 2020. The empirical results elucidate that the beneficial effects stemming from book-tax conformity on earnings persistence are exclusively accentuated in environments characterized by diminished levels of EM and TAG. Furthermore, given that tax aggressiveness contributes positively to earnings persistence, such benefits manifest exclusively within contexts featuring lower BTC. These findings lead to the conclusion that, in environments marked by heightened tax aggressiveness, superior-quality accounting information is attainable in circumstances characterized by reduced BTC. Conversely, potential enhancements in accounting information quality within a high BTC environment remain unrealized if such an environment fosters discretionary earnings management practices. These results furnish novel empirical insights into the relationship between BTC and earnings persistence in environments characterized by varying degrees of discretionary practices.

Influence Of ESG Information Disclosed On Social Media In Earnings Informativeness

ID: 77833

Authors: Caroline Keidann Soschinski, Inaê de Sousa Barbosa, Roberto Carlos Klann.

Source: Contabilidade Vista & Revista, v. 35, n. 3, p. 167-190, September-December, 2024. 24 page(s).

Keyword: ESG , Informativeness of Earnings , Social Media

Document type: Article (Portuguese) Show Abstract

This research is based on the assumption that companies engaged in environmental, social, and governance (ESG) practices have more informative earnings since they disclose additional information about their business. With the use of social media, it is expected that the informativeness of ESG firms' earnings will be enhanced, as such practices will have greater stakeholder visibility. Based on this context, this research aims to evaluate the effect of ESG information disclosed on social media on the earnings informativeness in Brazilian firms. The research considered 723 firm-year observations of Brazilian firms listed on the São Paulo Stock Exchange (B3), during the period from 2015 to 2019. The results indicated that, in the Brazilian context, unexpected earnings are not informative in themselves, and ESG disclosure is not perceived by market participants as complementary information to financial reports. Furthermore, it was identified that, although Brazilian firms engaged in ESG have higher unexpected earnings, these did not prove to be informative for the financial market. In general, it was identified that social media can be efficient communication channels for disseminating ESG information to the market, however, higher levels of engagement in ESG practices seem to nullify the positive effects provided by the use of media. Therefore, it is concluded that Brazilian firms that have ESG practices and disclose such information on social media do not have advantages in terms of earnings informativeness.