AUDITING AND EARNINGS MANAGEMENT IN BRAZILIAN HMOS

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Felipe Ramos Ferreira ORCID logo, Ricardo Lopes Cardoso ORCID logo, Antonio Lopo Martinez ORCID logo, Poueri do Carmo Mário ORCID logo

DOI:10.22495/cocv8i2c4p3

Abstract

This paper examines whether external auditing minimizes the propensity for manipulation of accounting information (MAI) by health maintenance organizations (HMOs), with respect to financial information disclosed to the Brazilian Health Care Agency (ANS). The results of univariate and multivariate analyses and robustness tests indicated no statistically significant differences in the propensity to MAI between audited and unaudited financial reports in the analyzed information. The empirical regularities shown in this study provide useful insights to foreign regulators and international auditors. Our study sheds light on the effectiveness of the recent reporting and auditing regulations in Brazil, suggesting that – in regard to the HMO industry – auditing has not begun to play a more effective role yet.

Keywords: Auditing, Earnings Management, Brazil

How to cite this paper: Ramos Ferreira, F., Cardoso, R. L., Martinez, A. L., & do Carmo Mário, P. (2011). Auditing and earnings management in Brazilian HMOs. Corporate Ownership & Control, 8(2-4), 436-449. http://dx.doi.org/10.22495/cocv8i2c4p3