УПРАВЉАЊЕ ФИНАНСИЈСКИМ РЕЗУЛТАТОМ КАО СТРАТЕГИЈА ФИНАНСИЈСКОГ ИЗВЕШТАВАЊА: МОДАЛИТЕТИ, МОТИВИ И ИМПЛИКАЦИЈЕ
EARNINGS MANAGEMENT AS A FINANCIAL REPORTING STRATEGY: MODALITIES, MOTIVES, AND IMPLICATIONS

Author(s): Teodora Tica Ilić, Kristina Peštović
Subject(s): Business Economy / Management, Financial Markets, Accounting - Business Administration, Socio-Economic Research
Published by: Savez računovođa i revizora Republike Srpske
Keywords: discretionary accruals; predictive model; Republic of Serbia;
Summary/Abstract: Earnings management is increasingly engaged as a strategic instrument within financial reporting, aiming to optimize the presentation of business performance and respond to the expectations of markets, shareholders, and regulatory bodies. This study explores the motives, modalities, and implications of such practices, with a particular focus on developing a predictive model able to timely identify accounting manipulations based on current financial statement data. Discretionary accruals, used as a proxy for earnings management, are calculated using the Modified Jones Model, methodologically adjusted to detect opportunistic accounting behaviour. Utilizing a sample of business entities from the Republic of Serbia, and applying regression analysis supported by statistical software tools, the research develops a model that identifies statistically significant determinants of earnings management, including profitability, firm size, sales growth, liquidity, asset structure, changes in net income, net income growth, firm age, and legal form. The implementation results indicate a high predictive accuracy of the model in distinguishing managerial behaviour patterns across observed entities. This approach provides managers, auditors, investors, and regulators with a practical tool for improved decision-making, enhanced reporting transparency, and reduced information asymmetry, thereby contributing to stronger corporate governance and the sustainable development of capital markets.

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