Corporate social responsibility and earnings management in U.S. banks

Vassiliki Grougiou*, Stergios Leventis, Emmanouil Dedoulis, Stephen Owusu-Ansah

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Business decision making depends on financial reporting quality. In identifying the drivers of financial reporting quality, proxied by earnings management (EM), prior literature has drawn attention to the association between corporate EM practices and commitment to corporate social responsibility (CSR). Empirical evidence, however, provides inconclusive results regarding the direction of this association. Using simultaneous equations, we examine the bi-directional CSR-EM relationship in U.S. commercial banks. We demonstrate that, although banks that engage in EM practices are also actively involved in CSR, the reverse relationship is not significant. We provide implications for investors, analysts, business participants and regulators.

Original languageEnglish
Pages (from-to)155-169
Number of pages15
JournalAccounting Forum
Issue number3
Early online date14 Jun 2014
Publication statusPublished - Sept 2014

Bibliographical note

© 2014, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International

Funding: European Union, Seventh Framework Programme (FP7-REGPOT-2012-2013-1) under Grant Agreement No. 316167.


  • banking institutions
  • corporate social responsibility
  • earnings management
  • ethics


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