Do Firm in the Tourism Sector Manage Earnings? The Case of the V4 Countries

Reference: Kliestik, T., Hrosova, L., Valaskova, K. & Svabova, L. (2022). Do Firm in the Tourism Sector Manage Earnings? The Case of the V4 Countries. Journal of Tourism and Services, 25(13), 120-136. doi: 10.29036/jots.v13i25.376

Authors

DOI:

https://doi.org/10.29036/jots.v13i25.376

Abstract

We study whether the presence of earnings management in the period of 2016-2019 occurs in companies operating in the tourism sector in the V4 countries, as the issue of earnings management in the tourism sector is not developed in these countries. To identify the presence of earnings management, we apply the Jones model in each V4 country to assess the occurrence of earnings management and its direction, degree, and extent. We use regression analysis in our paper. The existence of earnings management is verified using a non-parametric Mann-Whitney test. The direction, degree, and extent are verified through discretionary accrual percentages and average discretionary accruals. The data are drawn from the Amadeus financial database. The selection of companies is based on a set criterion, where the value of total assets in the period 2016-2019 will reach at least one million euros. Our analysis shows that companies in the tourism sector in the V4 countries manipulate profits. Discretionary accrual analysis reveals different positive and negative discretionary accrual values ​​in the V4 countries. Enterprises in Slovakia achieve lower values ​​of positive discretionary accrual compared to negative discretionary accrual. On the contrary, in the Czech Republic, Poland, and Hungary, companies achieve higher values ​​of positive discretionary accrual. We also found that companies in Slovakia manage their profits by decreasing compared to those in the Czech Republic, Poland, and Hungary, which in turn manage their profits by increasing.

Author Biographies

Tomas Kliestik, Faculty of Operation and Economics of Transport and Communications, University of Zilina, Zilina, Slovak Republic

prof. Ing. Tomas Kliestik, PhD.

Affiliation: The University of Zilina, Department of Economics, Faculty of Operation and Economics of Transport and Communications, Univerzitna 8215/1, 01026 Zilina, Slovak Republic, https://fpedas.uniza.sk/sk/.

Email: tomas.kliestik@fpedas.uniza.sk

Author's position: Associate Professor

Research interests: risk management, financial analysis, corporate governance, financial management, corporate finance, financial risk management, time series econometrics, finance, investment, prediction and construction of bankruptcy models, and earnings management.

Lenka Hrosova, Faculty of Operation and Economics of Transport and Communications, University of Zilina, Zilina, Slovak Republic

Ing. Lenka Hrosova

Affiliation: The University of Zilina, Department of Economics, Faculty of Operation and Economics of Transport and Communications, Univerzitna 8215/1, 01026 Zilina, Slovak Republic, https://fpedas.uniza.sk/sk/.

Email: lenka.strakova@fpedas.uniza.sk

Author's position: Ph.D. student

Research interests: creative accounting, earnings management, quantitative and qualitative fundaments of opportunistic earnings modeling, financial fraud, and financial statement.

Katarina Valaskova, Faculty of Operation and Economics of Transport and Communications, University of Zilina, Zilina, Slovak Republic

doc. Ing. Katarina Valaskova, PhD.

Affiliation: The University of Zilina, Department of Economics, Faculty of Operation and Economics of Transport and Communications, Univerzitna 8215/1, 01026 Zilina, Slovak Republic, https://fpedas.uniza.sk/sk/.

Email: katarina.valaskova@fpedas.uniza.sk

Author's position: Associate Professor

Research interests: financial economics and risk management, prediction of the financial health of companies, earnings management, quantification, and diversification of risks. 

Lucia Svabova, Faculty of Operation and Economics of Transport and Communications, University of Zilina, Zilina, Slovak Republic

doc. RNDr. Lucia Svabova, PhD.

Affiliation: The University of Zilina, Department of Economics, Faculty of Operation and Economics of Transport and Communications, Univerzitna 8215/1, 01026 Zilina, Slovak Republic, https://fpedas.uniza.sk/sk/.

Email: lucia.svabova@fpedas.uniza.sk

Author's position: Associate Professor

Research interests: statistics, econometrics, multivariate statistical methods, counterfactual impact evaluation, financial derivatives.

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Published

2022-12-20