The paper is designed to test the impact of net earnings on the sustainable development of manufacturing enterprises in Poland from 2008 to 2021. The study employs a dataset comprising variables, categorized into economic, social, and environmental pillars. We created synthetic indicators of sustainable development and its pillars, conducted a correlation analysis, and built single- and multi-equation econometric models. We used the Ordinary Least Squares (OLS) and Seemingly Unrelated Regression (SUR) methods. The results demonstrate a positive impact of financial performance on the economic and social pillars, while the environmental pillar exhibits a declining trend. The research has limitations related to the choice of time series, the scope of sustainability indicators, the selection of analytical variables, and estimation methods. Practical implications include applying econometric models to support decision-making processes to balance economic performance with social and environmental objectives. Social implications indicate the strength and direction of the impact of net earnings on the social development of the sector. What is new is the development of models enabling the analysis of the studied phenomenon among manufacturing enterprises in Poland.

Purpose: The purpose of the article is to examine how individual ethical orientations – idealism and moral relativism – are associated with accountants’ perception of earnings management practices. Additionally, the study analyses the relationship between selected professional factors and the judgement of earnings management. Methodology/approach: The study was conducted using a survey among 100 accountants, employing D. Forsyth’s Ethical Position Questionnaire and scenario-based assessments of earnings management practices developed by L. Jooste. To identify relationships between the analysed variables, linear and ridge regression methods were applied. Findings: Moral idealism influenced accountants’ perceptions of earnings management practices. The observed relationship was contrary to the initial expectations, suggesting that idealism takes a more pragmatic than absolutist form within the studied sample. Relativism was not associated with the evaluation of practices. Professional factors were associated with perceptions of ethicality – particularly the place of employment and the scope of responsibilities. Research limitations/implications: The study is limited by the relatively small sample size of 100 respondents. Nonetheless, the results provide valuable insights for practitioners and managers in shaping an ethical organisational culture and designing monitoring systems for earnings management practices. Originality/value: The study constitutes a novel attempt in Poland to empirically analyse the influence of accountants’ ethical orientations on the perception of profit (loss) management practices, integrating Forsyth’s model with a scenario-based approach.

The credibility and transparency of financial reporting directly influence investors' decisions, market trust, and capital allocation efficiency. Earnings management, which occurs when managers manipulate profit or loss levels known internally but not disclosed under normal circumstances, poses a significant challenge to assessing the quality of financial performance. This phenomenon encompasses accounting discretion, often pursued through creative interpretations of accounting standards. Although interest in earnings management spans over 70 years, detection methods have primarily been developed for large, developed markets such as the U.S., with limited adaptation for smaller or emerging economies. This study addresses methodological challenges in estimating earnings management in smaller markets, using the Polish regulated market as an example. Key issues include sample selection, model choice for accrual-based earnings management, definition of endogenous variables, and methodological approaches to estimation, such as cross-sectional versus firm-specific time-series data. Empirical findings indicate that, although the choice of regression model has a limited effect, the methodology for calculating total accruals and the criteria for sample grouping substantially influence the outcomes, with sectoral differences further highlighting the sensitivity of earnings management measures to methodological assumptions.

This study investigates the impact of accounting conservatism on the adopted patterns of earnings management in public companies listed on the Warsaw Stock Exchange. The scope of conditional conservatism was estimated by the occurrence of negative accruals in longer periods and the asymmetry of the relationship between accruals and operating cash flows separately. In turn, the magnitude of earnings manipulation was determined concerning accrual-based and real earnings management behaviours. Our findings confirmed that the magnitude of earnings management in public companies deploying accounting conservatism varies from the extent of earnings manipulation in non-conservative firms. We found that companies applying the prudence concept were, on the one hand, involved in altering earnings downward via accruals, but, on the other hand, they tend to manage earnings upward through real activities. By highlighting how accounting conservatism constrains accrual-based earnings management and signals prudence, our findings can help stakeholders assess managerial behavior, reduce information asymmetry, and evaluate the reliability of reported financial results. The results also highlight how conservative accounting affects both accrual-based and real earnings management in Poland, with variations across sectors, reflecting the country’s specific market characteristics.

This study investigates the impact of earnings management on shareholder returns among public companies listed on the Warsaw Stock Exchange (WSE) whose shares were traded throughout the 2014–2023 period. We run multiple linear regression with a stepwise procedure to examine how accrual-based earnings management (AEM) and real earnings management (REM) influence both traditional total shareholder return (TSR) and its relative version (RTSR). Our findings indicate that both earnings altering strategies have statistically significant negative effects on TSR and RTSR, suggesting that investors may penalize firms engaging in earnings manipulation. Among firm-specific control variables, we found that variables such as asset tangibility, short-term debt, and return on assets (ROA) also significantly affect shareholder returns. Thus, we confirmed prior research and support agency theory, emphasizing that managerial actions aimed at manipulating reported earnings can harm shareholder value. Despite modest explanatory power typical for market-based models, our results appear noteworthy and underscore the critical role of incorporating earnings management metrics in investment analysis and valuation models, suggesting such practices serve as salient risk signals for investors.

This study investigates how accounting professionals’ workplace influences their ethical perceptions of earnings management practices. Using a sample of 100 participants from five workplace categories - accounting offices, private companies, public companies, audit firms, and self-employed accountants - we assessed responses to 13 scenarios based on the Bruns and Merchant (1989) questionnaire. Results from ANOVA and repeated measures ANOVA revealed that workplace significantly affected overall ethical perceptions, accrual-based earnings management, and single-year earnings management, whereas real earnings management and multi-year earnings management showed no significant differences. Post-hoc tests indicated that auditors adopt the strictest ethical stance, while self-employed practitioners are the most permissive. These findings extend previous research by examining a broader set of professional groups and confirm that workplace-related differences persist at the scenario level. The results have practical implications for regulatory bodies and professional associations in designing targeted ethics training and policies to improve transparency and quality in financial reporting.

This paper investigates real earnings management (REM) practices in public non-financial companies listed on the Warsaw Stock Exchange (WSE) from 2014 to 2023, focusing on sectoral differences and the influence of market competition. REM, defined as deviations from normal business operations aimed at manipulating reported earnings, can distort financial information and harm long-term firm value. This study contributes to the existing literature in two key ways. First, it examines variations in abnormal levels of production costs, sales, and discretionary expenditures – REM proxies based on Roychowdhury’s methodology – across sectors classified according to the WSE’s industry framework. This sectoral classification, reflecting economic activities and client types, allows for identifying industries with distinct REM patterns and uncovering hidden relationships in earnings manipulation across sectors. Second, the research evaluates the impact of industry-specific characteristics on REM using concentration measures such as the Herfindahl-Hirschman Index (HHI) and the entropy ratio (E). Our sample of 218 companies shows significant sectoral variation in REM, with consumer goods firms exhibiting the highest level of earnings manipulation and finance sector firms the lowest. We find significant negative associations between market competition and certain REM proxies – specifically, abnormal production costs and discretionary expenditures – while aggregate REM measures do not show similar relationships. These findings challenge prior studies that suggest greater REM activity in less competitive industries. Limitations include sample restrictions to firms with consistent reporting and at least ten years of trading on the WSE, covering approximately half of the market. Future research incorporating variables such as ownership structure and corporate governance could enhance model fit. Overall, this study offers valuable insights for investors, regulators, academics, and financial statement users who rely on high-quality earnings information to distinguish economically efficient firms.

This study examines the impact of cost stickiness (CS) and real earnings management (REM) on the financial distress risk of publicly traded companies listed on the Warsaw Stock Exchange (WSE) between 2014 and 2023. The extent of earnings manipulation through real activities was estimated using three aggregated REM proxies developed by Roychowdhury. Cost stickiness was analysed through the model proposed by Anderson et al., which establishes a linear relationship between changes in the natural logarithm of costs and simultaneous changes in the natural logarithm of sales revenue. To assess financial distress risk, the study employed the Altman Z″-score model, specifically adapted for emerging markets. Empirical analyses reveal a statistically significant positive relationship between REM intensity and financial distress risk in the examined sample. Additionally, the study underscores the strategic advantages of cost stickiness for financially stable firms, such as enhanced profitability stability and operational efficiency. Conversely, firms exhibiting lower levels of cost stickiness are more susceptible to financial distress, likely due to aggressive cost-cutting strategies that undermine financial stability. This study contributes to the literature on earnings management and cost behaviour by providing empirical evidence from an emerging market. Unlike prior research, it jointly examines the interplay between real earnings management and cost stickiness in the context of financial distress risk, offering novel insights into their combined impact on corporate financial stability.

The energy sector is crucial for the country’s stable and lasting socioeconomic development and for implementing environmentally friendly technologies. The sustainable development of the energy sector takes place in three pillars: economic, social, and environmental. It means improving economic results while increasing the share of alternative energy sources. The paper aims to assess the impact of socioeconomic cohesion on the sustainable development of the energy sector in France, Germany, and Poland. We created indicators of sustainable development and socioeconomic cohesion. We used correlation analysis to examine the relationships. Additionally, we created a single- and multi-equation model, which we reset using the ordinary least squares method and Seemingly Unrealized Regression. The results of the linear correlation coefficients show a very strong relationship between socio-economic cohesion and the sustainable development of the energy sector in Poland (Pearson’s R 0.94), a weaker correlation in Germany (0.811), and the weakest in France (0.59). The results suggest that the relationship is strongest in the country with the lowest economic development and the smallest share of renewable energy, a significant positive impact on the sustainable development of the energy sector. The strength of this impact is varied in the countries studied, indicating a different level of advancement and development in the countries studied.

This study explores how individual moral philosophies influence accountants’ ethical perceptions of earnings management risk, addressing the broader question of how moral reasoning interacts with the cultural environment in shaping financial reporting decisions. Although accounting standards such as IFRS/IAS aim to harmonize reporting, cultural, and institutional factors can lead professionals to interpret and apply them differently, making ethical perceptions context-dependent. Building on positive accounting theory and Forsyth’s model of personal moral philosophy, we conducted a scenario-based survey among Polish accounting professionals, using an extended set of earnings management scenarios developed by Bruns and Merchant and modified by Jooste. Our results indicate that subjectivists demonstrate greater ethical sensitivity to earnings-altering behavior, while absolutists exhibit the least. We also examined ethical evaluations across different types of earnings management practices, including income-increasing versus income-decreasing, accrual-based versus real earnings management, and multi-year versus single-year manipulations. Understanding how different moral orientations influence the perception of managerial interventions in reported figures can help executives foster an organizational culture that promotes the provision of reliable and accurate information to stakeholders. Study limitations include sample size and scope, suggesting the need for future research incorporating broader demographics and contextual variables.

Purpose: This paper investigates the relationship between dividend payout frequency and earnings quality among public companies listed on the Warsaw Stock Exchange (WSE) from 2014 to 2023. It examines whether companies regularly paying dividends report higher quality earnings compared to non-payers. Design/methodology/approach: The study analyzes data from 217 companies continuously traded on the WSE Main Market, excluding banks and insurers. Earnings quality is measured using five proxies: earnings persistence, predictability, income smoothing, accrual-based earnings management, and real earnings management. The Mann–Whitney U test compares earnings quality between dividend-paying and non-paying firms. Findings: Companies with at least three dividend payments between 2014 and 2023 demonstrate significantly better earnings quality, indicated by lower discretionary accruals, greater earnings stability and predictability, and reduced income smoothing. These results align with theories that dividends signal financial health and discipline management. Research limitations/implications: While the non-parametric approach and absence of controls for firm-specific factors (e.g., size, industry) limit the ability to fully isolate causal effects, these constraints stem from the non-normal distribution of key variables. Nevertheless, the findings provide valuable initial evidence of differences in earnings quality linked to dividend behavior. This study paves the way for future research applying more advanced multivariate techniques to control for confounding variables and deepen understanding of underlying mechanisms. Practical implications: Dividend payment patterns can serve as indicators of reporting quality and corporate governance, aiding investors and regulators in decision-making. Social implications: Enhancing transparency through dividend policies may strengthen investor trust and market efficiency, supporting broader economic stability. Originality/value: The paper contributes new empirical evidence from the Polish market on the dividend–earnings quality nexus, using a comprehensive earnings quality framework over a decade-long period. Moreover, it uniquely highlights the role of dividend payout frequency as a practical indicator of financial reporting quality in emerging European capital markets. Keywords: dividend policy, profit redistribution, earnings quality, earnings management, financial transparency. Category of the paper: Research paper.

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.

Rozdział prezentuje historię i teraźniejszość Instytutu Logistyki i Informatyki na Wydziale Ekonomiczno-Socjologicznym Uniwersytetu Łódzkiego. Autorzy omawiają tradycje badawcze i dydaktyczne, koncentrując się szczególnie na okresie ostatnich dziesięciu lat.

The purpose of this paper is to investigate the impact of the SARS-CoV-2 pandemic turbulence on the extent and intensity of earnings management practices according to the opinions of representatives of non-financial companies listed on the Warsaw Stock Exchange (WSE). Methodology. This study is based on the method of standardised computer-assisted questionnaire interviews (CATI). The research sample consisted of 37.1% of all companies indexed on the WSE Main Market that do not operate in the banking, insurance or capital market services sectors. The target respondents were managers, employees of financial and accounting services and other persons authorised by the company's managerial staff representatives. Results. The survey findings showed that the economic turbulence caused by the SARS-CoV-2 pandemic contributed to an increase in earnings management activities in public companies. Respondents who reported that the companies they represented deliberately manipulated earnings were much more confident about the negative impact of the pandemic crisis on the quality of reported data. An interesting finding of the research is that respondents who had experienced earnings management in their professional practice were more likely to believe that the pandemic had distorted the credibility of reported earnings. Finally, the study provided statistical evidence that respondents from larger companies were more likely than respondents from smaller companies to say that the economic crisis related to the SARS-CoV-2 pandemic contributed to an increase in earnings management activities. Practical implications. This investigation may draw the attention of market participants to the deterioration in the financial reporting of non-financial public companies during the SARS-CoV-2 pandemic. The intensification of profit manipulation may not only distort the current perception of the company's economic performance, but also deteriorate the future value of companies. In addition, the findings provide valuable information for statutory auditors, as they highlight potential audit risks that may arise with the onset of the SARS-CoV-2 pandemic. Value/originality. Unlike most studies on the subject, this research does not focus on the estimated values of discretionary accruals, but on the knowledge and experience of financial professionals who are familiar with the specifics of the Polish capital market. An original contribution to the literature is the inclusion in the study of potential factors that could influence the respondents' perception of the impact of the consequences of the SARS-CoV-2 turbulence on the pattern and intensity of the earnings management phenomenon.

Objective: The objective of the article is to investigate the impact of earnings manipulation on the perception of the earnings management phenomenon by financial specialists in public enterprises listed on the Main Market of the Warsaw Stock Exchange (WSE). Research Design & Methods: Empirical analyses were based on questionnaire research conducted among 124 finance specialists of listed companies. We used the Mann-Whitney U Test to compare the significance of differences in perceiving the earnings management phenomenon. Findings: The research proved statistically significant differences in the ethical perception of earnings manipulation between participants representing firms that implement and do not implement earnings management behaviours. Moreover, it allowed for gathering statistical evidence about the differences in the judgement of the possibility of detecting earnings-violating practices by statutory auditors in the eyes of diverse stakeholder groups. Furthermore, this study revealed significant differences between the respondents regarding the assertion that the auditor’s positive opinion on the financial report constitutes a guarantee for investors of the high-quality reported data. Implications & Recommendations: This study evidenced that participants who declared deploying earnings management in the companies they represent perceived the earnings management behaviour less rigorously and more liberally than individuals engaged in firms that did not manipulate earnings. Contribution & Value Added: The conducted research is an important contribution to the research gap and the foundation for future studies on the perception of earnings manipulation in the context of the Polish capital market.

Abstract This paper aims to assess the influence of the SARS-CoV-2 pandemic on the accrual-based earnings management patterns in non-financial business groups in the Warsaw Stock Exchange (WSE). This study contributes to the existing literature by considering earnings manipulation behaviours in assessing the reporting data quality, both in consolidated financial statements of business groups and individual financial statements of parent undertakings. The research methods are based on the Modified Jones Model with the simultaneous separation of individual subcategories of accruals via cross-sectional analysis and time-series data approach (separately for each business group). Empirical findings supported the presumption that earnings manipulation schemes in the SARS-CoV-2 transitional (2020) and crisis (2021) periods differed statistically compared to the previous 2019 and 2020 years, respectively. Moreover, this article proved that the company‘s potential financial distress could imply accrual-based earnings management behaviours and moderate the association between the SARS-CoV-2 pandemic and earnings manipulations activities. Finally, the obtained results confirmed that although business groups have an expanded set of balance sheet policy instruments, the quality of earnings reported in the individual financial statements of parent undertakings and the consolidated financial statements of business groups were similar during the SARS-CoV-2 pandemic.

The aim of the study is to analyse the relationship between the degree of use of accrual-based earnings management and real earnings management instruments and the size of public companies.

The paper's main aim is to investigate the relationship between the ESG activities scores and profitability metrics of 33 public companies listed on the Warsaw Stock Exchange. By utilizing the Refinitiv methodology, we answer whether a company's environmental, social and governance performance perspectives positively affect the ROA, ROE and ROC ratios or whether there is a negative relationship. A secondary objective of the research is to investigate the relationship between profitability and the magnitude of aggregate-based earnings management in the tested sample. The moderating effect of earnings manipulation on the links between ESG performance and a company's profitability metrics is a research gap that has not been well-studied to date. This research demonstrates contradictory results: a positive relationship between the social dimension of ESG activities and the financial performance of companies was observed regarding ROE and ROC ratios. The negative impact of the environmental pillar rank on the ROA ratio was captured only in selected regression analyses. The governance pillar score did not statistically affect the tested profitability metrics. On the other hand, we gathered evidence that public companies with a high range of non-financial disclosures tend to alter earnings via accruals, and discretionary accruals statistically affect the ROA, ROE and ROC ratios. This finding contrasts previous research claiming that the earnings management phenomenon is a typical agency problem and that the policy of non-mandatory disclosures following the ESG assumptions could constrain the asymmetry of information and managerial information advantages.

Purpose – The main objective of the paper is establishing the characteristics of the Q-Test and EQ‑Score measures as alternative tools for assessing the earnings quality of public companies. Research method – The estimation of the earnings quality was prepared basing on the analytical formulas of Putman et al., and Gullet et al. models. The exemplification research studies were conducted for public companies classified in the WIG‑DIV index of the Warsaw Stock Exchange in 2016–2020. Results – There are positive relationships of medium strength between the calculated values of the Q-Test and EQ‑Score indicators. In the analyzed research sample, the average values of the Q-Test indicators were generally higher than the average values of the EQ‑Score indicators and were characterized by a greater degree of dispersion. The EQ‑Score is statistically significantly correlated with the discretionary accruals separated using the Jones and Kasznik models, which indicates its potential for predicting the earnings management phenomenon. Originality / value / implications / recommendations – The study is the first example of empirical verification of the usefulness of the Q-Test and EQ‑Score models in assessing the quality of the financial results of public companies operating on the Polish capital market.