The Impact of IFRS 15 on Earnings Management

Abstract

We study the effects of the adoption of the new standard IFRS 15 Revenue from Contracts with Customers, effective in 2018, on accrual-based earnings manage-ment for firms listed on the Oslo Stock Exchange. Our estimates are based on tradi-tional discretionary accrual measures, the modified Jones-model by Dechow et al. (1995) and the performance-matched modified Jones-model by Kothari et al. (2005). We find evidence of weaker earnings management in the post-adoption period of IFRS15 for firms listed on Oslo Stock Exchange, while we don’t find evidence that IFRS 15 has had a stronger impact on earnings management in the energy sector.