A thesis by SSE Riga students has been published in the Baltic Journal of Management
The Bachelor Thesis written by SSE Riga students Elva Poriete and Reinis Novickis (Class of 2018) and co-authored by Professor Anete Pajuste has been converted into a peer-reviewed publication.
The paper is forthcoming in the Baltic Journal of Management, with a title "Management reporting complexity and earnings management: evidence from the Baltic markets". The Journal publishes multidisciplinary perspectives on contemporary issues and opportunities in emerging fields of management.
This paper explores how the text complexity and content of management discussion and analysis (MD&A) relate to earnings management in Baltic listed companies.
The results show that earnings could be managed in about 6–11% of firm-years, and there is a positive relationship between earnings management and reporting complexity in more liquid companies.
The paper presents a novel application of the opportunistic perspective of positive accounting theory (PAT) in relation to managers' choice of reporting complexity.
The findings of this paper contribute by providing empirical evidence for strategic reporting by managers and can be useful for regulators and investors that should monitor the level of reporting complexity in the listed companies.