IFRS Applied to Investment Instruments and Their Relationship With Earnings Management

Abstract

From the original model Jones (1991) different authors have investigated, the chances of discretionary and non-dis- cretionary earnings management in the financial information presented by companies. After the financial scandals that have occurred both nationally and internationally on some publicly traded companies, it is interesting to analyze the possibilities of accounting manipulation by discretionary adjustments associated with market movements. The cor- rect operation of the market depends on the confidence that investors have about the financial information provided by listed entities at stock exchange, which is why this information should possess characteristics of objectivity, integ- rity and complete to accurately represent the situation of the company at the moment that they are sharing the infor- mation. This research has the purpose of request information through a literature review of national and international situation regarding the matter, and then analyze some options that deliver the International Financial Reporting Stan- dards, better known by its acronym IFRS. Product of the above analysis is expected to achieve evidence on whether optionality mixed with low internal control standard companies, and / or poor quality of external audit could protect earnings management behavior in business.