Does government contracting translate to better earnings quality and less earnings management? In this study, we seek to answer this question. We find strong evidence that government suppliers strategically substitute accrual-based earnings management with real earnings management. Firms with...

Prior research suggests that risk and uncertainty in general, and country-wide political risk in particular, motivate managers to engage in earnings management. Using the text-based proxy for managers’ perception of political risk developed by Hassan et al. (2019), as well as principal...