COVID-19 PANDEMIC AND EARNINGS MANAGEMENT

Abstract

This paper examines the effect of COVID-19 on earnings management. Using a sample of 423 publicly listed firms in Vietnam from 2011 to 2021, the result shows that firms are more likely to engage in earnings managment during the COVID-19 pandemic, compared to the preceding period. This implies that the unfavourable and highly-uncertain financial environment induced by the COVID-19 pandemic creates incentives for managers manipulating earnings. The result is robust to the alternative measure of earnings management and the severity of COVID-19.