Responsabilidade social corporativa e gerenciamento de resultados no brasil1 corporate social responsibility and earnings management in brazil

Objective: This study aims to examine the association between earnings management (EM) practices and corporate social responsibility (CSR) actions in Brazilian companies. Background: In the Brazilian context, the high concentration of ownership, and previous organizational scandals involving information concealment, it is theorized that the companies may employ CSR practices to camouflage opportunistic EM behavior. Method: This investigation utilized an unbalanced panel of publicly traded companies, resulting in 355 observations. The data covered the period from 2012 to 2016. Ordinary Least Squares (OLS) regression was employed to analyze the relationship. EM was measured using the discretionary accruals model proposed by de Pae (2005) and the accruals quality model by Allen, Larson, and Sloan (2013). CSR was evaluated using a multidimensional model encompassing environmental and social practices. Results: The findings indicate a negative relationship between EM and CSR, suggesting that companies adopt CSR practices and manage their results with less intensity. This behavior aims to promote transparency and higher-quality information, aligning with the informational CSR approach of the company. These results contradict the initial hypothesis of this research. Contributions: This study offers valuable insights to stakeholders by suggesting that Brazilian companies do not appear to engage in CSR practices to conceal their opportunistic EM practices. Such findings can aid analysts in forecasting and assist investors in making informed decisions regarding socially responsible companies.