The observed smoothing of earnings (i.e. negative contemporaneous correlation between accruals and cash flows) is the joint product of the role of accruals in smoothing out transitory fluctuations in operating cash flows (noise reduction role) and the role of accruals in providing timely gain...

This study investigates the relationship between corporate sustainability performance and earnings management practices in a European setting. We measure earnings management based on discretionary accruals (cash flow approach) and real activity management. Corporate sustainability performance is...