We analyse whether differences in earnings management practices in frontier countries can be explained by institutional settings, considering their diverse corporate governance environments, legal regimes, and accounting standards. Across 22 frontier market countries from 2000–2017, we find that financial disclosure, legal environments, and the number of analysts following to be correlated with reduced levels of earnings management (EM). The impact of wealth, GDP growth, firm size, and the use of Big-4 auditors were also associated with reduced EM. Contrary to developed markets and novel to this study, higher levels of societal trust failed to show significance in its ability to constrain EM, suggesting informal institutions are less influential as control monitors. Findings herein verify that the factors that moderate EM are not universally applicable, and help highlight international differences in the management of earnings.

中文翻译：

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前沿市场的盈余管理：机构设置重要吗？

我们分析了边境国家的盈余管理实践的差异是否可以通过制度设置来解释，同时考虑了它们不同的公司治理环境，法律制度和会计标准。从2000年至2017年，我们在22个前沿市场国家/地区中发现，财务披露，法律环境以及随后的分析师人数与收益管理（EM）降低水平相关。财富，GDP增长，公司规模以及使用Big-4审计师的影响也与新兴市场的减少有关。与发达市场和本研究不同的是，较高水平的社会信任未能显示其对新兴市场的约束能力，这表明非正式机构作为控制监督者的影响较小。