Earnings Manipulation Among the Main Industrial Sectors. Evidence from Italy

Economia Aziendale Online, Vol. 5. 4/2014: 253-261, ISSN: 2038-5498

11 Pages Posted: 15 May 2015

See all articles by Francesco Paolone

Francesco Paolone

University of Teramo; University of Naples "Parthenope"

Cosimo Magazzino

University of Rome III; Royal Economic Society; Italian Economic Association

Date Written: 2014

Abstract

This paper examines the risk of earnings manipulation among the Stock Italian Companies (“Società per Azioni”) in the main industrial sectors. The companies have been selected from the leading industrial sectors (textile, food, clothing, automotive and metallurgic) which have been generating relevant revenue streams over the past decades. These industry sectors have considered the ones who have driven the Italian Economy. By collecting financial data from AIDA database, we test the existence of Earnings Manipulation within Stock Italian Companies using the Beneish Model (Manipulation Score). The analysis conducted to those companies shows that the application of the model brings to the following interpretation: by using the threshold-limit of -1.78 (Beneish et al., 2013) a half of the companies analyzed has a low probability of manipulating income.

Keywords: Financial Accounting, Earnings Management, Earnings Manipulation, Performance Measurement

Suggested Citation

Paolone, Francesco and Magazzino, Cosimo, Earnings Manipulation Among the Main Industrial Sectors. Evidence from Italy (2014). Economia Aziendale Online, Vol. 5. 4/2014: 253-261, ISSN: 2038-5498, Available at SSRN: https://ssrn.com/abstract=2605886

Francesco Paolone

University of Teramo ( email )

Via R. Balzarini 1
Località Colleparco
Teramo, 64100
Italy

University of Naples "Parthenope" ( email )

Via generale parisi
Naples, Naples 80133
Italy

Cosimo Magazzino (Contact Author)

University of Rome III ( email )

Via Ostiense 139
Rome, RM 00154
Italy

HOME PAGE: http://scienzepolitiche.uniroma3.it/cmagazzino/

Royal Economic Society ( email )

London
United Kingdom

Italian Economic Association ( email )

Piazzale Martelli, 8
Ancona, AN 60121
Italy

HOME PAGE: http://www.siecon.org/online/en/

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