Modeling the Relationship between Real Earnings Management and Accruals in Different Economic Regimes

Hashemian, Niloofar; Sadeghi, Mohsen; Karimi, Farzad

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year 17, Issue 68 (2026)

fa 2026, 17(68): 1-24

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Modeling the Relationship between Real Earnings Management and Accruals in Different Economic Regimes

Niloofar Hashemian¹

, Mohsen Sadeghi ^*¹

, Farzad Karimi²

1- Department of Accounting, Mo. C., Islamic Azad University, Isfahan, Iran.
2- Department of Management, Mo. C., Islamic Azad University, Isfahan, Iran.

Abstract: (31 Views)

The aim of the present study is to model the relationship between real earnings management and accruals in different economic regimes. The present study is applied-exploratory. The research period is 2011-2023. Data from 131 listed companies were used in estimating the model. Initially, the determining factors on real and accrual earnings management were determined based on Bayesian averaging models. By performing calculations and examining the effects of 56 factors that were known to be effective in empirical studies on accrual earnings management and 13 factors that were effective on real earnings management, it was found that the effect of 8 variables on these two types of earnings management was significant and that these variables always maintained their effect in the presence of other variables and, in other words, were non-fragile. Based on the results, the dominant regime in the capital market was evaluated as the prosperity regime.According to the results, in the boom and normal periods, the relationship between the two types of earnings management is positive and complementary; in other words, in these periods, companies increase both types of earnings management; but in recessionary conditions, the relationship between the two types of earnings management is substitutional, and considering the larger coefficient of real earnings management over accrual earnings management, it is concluded that the substitution relationship in recessionary conditions is in favor of real earnings management; in other words, in recessionary conditions, real earnings management replaces accrual earnings management.

Article number: 1

Keywords: Accrual Earnings Management, Real Earnings Management, Bayesian Averaging, Regime Change.

Full-Text [PDF 1257 kb] (31 Downloads)

Type of Study: Applicable | Subject: Special

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Hashemian N, Sadeghi M, Karimi F. Modeling the Relationship between Real Earnings Management and Accruals in Different Economic Regimes. fa 2026; 17 (68) : 1
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