Reflections on Earnings Management Based on the Jones Model and Subsequent Adaptations
Reflexiones Acerca de la Gestión de Resultados a partir del Modelo de Jones y Adaptaciones Posteriores
DOI:
https://doi.org/10.29394/Scientific.issn.2542-2987.2025.10.37.20.402-423Keywords:
earnings management, accrual adjustments, creative accounting, auditing, information qualityAbstract
Earnings management is a central concern of contemporary financial research. Drawing on agency theory, Jensen and Meckling (1976) explain how conflicts between shareholders and managers foster the manipulation of financial information; Healy (1985) deepened this logic by linking discretionary accrual policies to executive compensation schemes. The Jones (1991) model responded with the first systematic econometric instrument for detecting discretionary accruals, separating them from non-discretionary ones driven by real economic activity. Its limitations were progressively addressed: Dechow et al. (1995) corrected the bias in accounts receivable; Kothari et al. (2005) incorporated return on assets to neutralize performance-related distortions; Roychowdhury (2006) extended the analysis to real earnings manipulation. However, all these models assume stable parameters over time, an assumption that rarely holds in volatile environments. Added to this, as Wijaya et al. (2025) and Githaiga et al. (2022) note, is the scarcity of studies in Latin American markets, which limits the transferability of these models to different institutional contexts. A critical review of this trajectory is therefore a necessary contribution to accounting research in Spanish.
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