Dissertacao Mar ... - Versão Final - 02-08.pdf - Sistema de ...

ABSTRACT
The main objective of this dissertation is to investigate the impact of accruals on the corporate
earnings variability (EVAR) results that influence the practical application of income
smoothing in Brazilian capital market firms. Initially, it approaches the importance of
financial statements that must be evidenced in compliance with accounting principles
generally accepted. Its disclosure should represent the reality of the economic-financial firm
to the process of decision-making of shareholders and creditors. But at certain times,
managers are motivated to practice the earnings management in an attempt to reduce the
variability of profits through the use of accruals. The accruals represent the difference
between net income and operating cash flow. In the process for reducing results volatility
managers use the practice of income smoothing that represents a smoothing of profits,
reducing any distortions in the market price of the firm. In this study, the sample is formed by
a group of 163 capital market firms listed on Bovespa and presenting financial information in
the period 2000 to 2007, categorized by sector, using data obtained in Economática. The
statistical model used for this research was the regression analysis in order to explain the
different cross-sectional models. These survey results indicate that accruals are significant to
explain the EVAR of Brazilian companies. Our results suggest that the identification of
structural model corporate earnings variability (EVAR) in Brazilian companies should be
evidenced by non-financial variables that differ from those made by U.S. firms.
Keywords: accruals, income smoothing, earning variability, EVAR, Model Jones and
Modified Model Jones.