RESULTS MANAGEMENT IN THE PUBLIC SECTOR: A LOOK AT THE COMPETENCE REGIME IN BRAZILIAN STATES
DOI:
https://doi.org/10.5281/zenodo.13894175Keywords:
Opportunistic Behavior, Public Accounting, Public Sector, Results ManagementAbstract
The adoption of the accrual accounting regime by the Brazilian Public Administration in 2014 marked a significant transformation in the patrimonial accounting of federative entities, which previously relied on the budgetary approach. This change, driven by the International Public Sector Accounting Standards (IPSAS), enabled the preparation of financial reports that more accurately reflect revenues and expenses in the period they occur. However, this approach also revealed the potential for earnings management, as managers might manipulate financial information to present more favorable results. This study analyzes earnings management in Brazilian public sector under the focus on discretionary accruals and justifies its relevance amid the increasing societal demand for efficiency and transparency in public resource management. Employing a modified Jones (1991) model, the research investigates earnings manipulation in the financial statements of 26 brazilian states and the Federal District from 2014 to 2021. The results confirm the hypothesis of earnings management in state federative units.
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