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The Price of Control: Pandemic Lockdowns and Perceived Earnings Quality

Year: 2025

Type: article

Abstract: ABSTRACT In this study, we investigate whether investors perceived earnings quality to be impaired by lockdown policies implemented to control the spread of COVID‐19. Using a sample of American Depositary Receipts (ADR) firms, we find that investors perceived earnings quality to be adversely impacted as the lockdown period lengthened. This effect is more pronounced in countries with a history of scandals and among younger companies. Our findings provide valuable insights for stakeholders focused on assessing the impact of COVID‐19 on earnings quality.

Source: Accounting and Finance

DOI: 10.1111/acfi.70040

Authors: Lin‐Hui Yu, Yan‐Yu Chou, Rong‐Ruey Duh, Jengfang Chen

Institutions: National Taiwan University, National Pingtung University, Macquarie University

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,470