Study of the relationship between income smoothing and governance in brazilian individual credit unions

Purpose: This study investigates the influence of cooperative governance practices on earnings management through income smoothing in Brazilian singular credit unions between 2018 and 2021. Design/methodology/approach: Application of the Weighted Least Squares (WLS) method with correction for heteroskedasticity, using a sample of 3,435 observations. Cooperative governance was operationalized through a binary variable, based on the criteria established by Central Bank Resolution No. 4,434/2015. Research, Practical & Social implications: The study highlights the role of cooperative governance in reducing income smoothing practices, contributing to greater transparency and higher quality of accounting information in credit unions. The results provide valuable insights for academic literature, regulators, and industry managers. Originality/value: By focusing on income smoothing in a specific class of financial institutions—Brazilian singular credit unions—this research addresses a gap in the literature. The empirical approach and contextual relevance of the cooperative sector highlight the study’s originality and its potential impact on both governance and financial reporting discussions.