Year: 2025
Type: article
Abstract: The financial consequences of the COVID-19 pandemic outbreak severely impacted the hotel industry in the Republic of Croatia. These events provided a strong impetus for the application of earnings management techniques to mitigate the financial repercussions of the COVID-19 crisis. Given that subsidiaries can be utilised for the activities mentioned above, this study examines the moderating effect of subsidiary companies on the relationship between earnings management and the COVID-19 pandemic. The research sample comprised data from 2015 to 2020 for companies classified as hotels and similar accommodations listed on the Croatian stock exchange. The Jones model was employed to assess the magnitude of earnings management, while panel regression was utilised to estimate the research model. The findings indicate that earnings management decreased during the COVID-19 pandemic in the hotel industry. Despite severe financial difficulties, even companies with the potential to reduce their financial reporting quality through subsidiaries did not do so, plausibly due to corporate awareness of increased public interest and their expectations regarding earnings management.
Source: Tourism
DOI: 10.37741/t.73.4.7
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4415784377
FWCI:
Cites:
Cited by:
Related to: