Work

Study of the relationship between income smoothing and governance in brazilian individual credit unions

Year: 2025

Type: article

Abstract: Purpose: This study investigates the influence of cooperative governance practices on earnings management through income smoothing in Brazilian singular credit unions between 2018 and 2021. Design/methodology/approach: Application of the Weighted Least Squares (WLS) method with correction for heteroskedasticity, using a sample of 3,435 observations. Cooperative governance was operationalized through a binary variable, based on the criteria established by Central Bank Resolution No. 4,434/2015. Research, Practical & Social implications: The study highlights the role of cooperative governance in reducing income smoothing practices, contributing to greater transparency and higher quality of accounting information in credit unions. The results provide valuable insights for academic literature, regulators, and industry managers. Originality/value: By focusing on income smoothing in a specific class of financial institutions—Brazilian singular credit unions—this research addresses a gap in the literature. The empirical approach and contextual relevance of the cooperative sector highlight the study’s originality and its potential impact on both governance and financial reporting discussions.

Source: Gestão org

DOI: 10.51359/1679-1827.2025.264595

Authors: Clarissa Cabral Leite, Josete Florencio dos Santos, Ramon Rodrigues dos Santos

Institutions: Estácio (Brazil), Universidade Federal de Pernambuco

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Peace, justice, and strong institutions

Open Access status: diamond

Funder: Universidade Federal de Pernambuco