Earnings management among industries: between the old and new economies

This paper investigates sectoral prevalence and patterns of accrual-based earnings management in public companies listed on the Warsaw Stock Exchange. This research intro­duces a novel perspective by analysing differences in discretionary accruals proxies among in­dustries, with particular emphasis on statistical variation of the earnings management through accruals in the old and new economies companies. Moreover, this paper fills a research gap in the literature regarding a shortfall of broader analyses on the industry-specific attributes explaining earnings management behaviours. Our findings confirmed that the extent of accrual-based earnings management in public com­panies varies significantly depending on the industry in which they operate. We demonstrated that companies from the new economy industries and those operating in less concentrated markets engaged in accrual-based earnings management practices more than others. On the other hand, we did not find a statistically significant relationship between the accounting-type earnings management and company-specific product market power from the perspective of the pooled sample and subsamples characterized by the specific directions of earnings games.