Empirical Studies in Financial Accounting

Abstract The importance and role of Media and NEWS are increased by improvement of Information and Communication Technologies. This article try to find role of medias’ news in corporate earning management strategies. So, I investigate for show impact of media coverage on replacement and trade off between Accrual Earning Management (AEM) and Real Earning Management (REM) (Earning Management Strategy). For this purpose, I collect NEWS about listed companies during 2015 until 2020 and used Heckman's Two-Step for measure replacement between AEM and REM. I used Different in different and Feasible Generalized Least Squares (FGLS) methods for hypothesis testing.

Results show that earning management strategies are different in reaction of media coverage. Increase of media coverage cause companies decrease AEM but they use REM more than usual in this position. In additional, research findings show that companies with higher media coverage and suspect to earning management try to more change in board of directors. So, results show that media has controlling and pressure effect on companies for earning management’s strategy.

Abstract The two approaches are more prominent in the accounting literature, accrual-based earnings management and manipulating the actual activities however, the present study is considered the third type of earnings management model, namely a classification shifting. The purpose of this study is to investigate the effect of constraints on earnings management strategies on the application of shifting strategy in earnings classification in the Iranian capital market. The research sample consisted of 114 firms from 2013 to 2021 (1026 observation). Logistic regression models have been used to test research hypothesis. The results of the study show that financial health, institutional shareholders, audit firm size and market share have a negative and significant effect on the classification shifting. Also, the operating cycle has a positive and significant effect on the c classification shifting; and its tenure does not have a significant effect on the classification shifting. Additional tests indicated large companies have a greater incentive to do classification shifting (a form of earnings management) compared to small companies, because they have greater political costs.