Free Cash Flow and Earnings Management in Brazil: The Negative Side of Financial Slack

Authors

  • Antonio Lopo Martinez

  • Fabricio Terci Cardoso

  • Aridelmo J. C. Teixeira

Keywords:

free cash flow, discretionary accruals, earnings management

Abstract

The article investigates whether Brazilian firms with excess free cash flow (FCF) and low growth perspectives (Jensen. 1986), when there is excess FCF, accompanied by limited growth perspectives, managers have incentives to camouflage the impact of investments in projects with negative net present value (NPV) by presenting inflated profits. The study includes firms listed on the BMF

How to Cite

Antonio Lopo Martinez, Fabricio Terci Cardoso, & Aridelmo J. C. Teixeira. (2014). Free Cash Flow and Earnings Management in Brazil: The Negative Side of Financial Slack. Global Journal of Management and Business Research, 14(D1), 75–86. Retrieved from https://journalofbusiness.org/index.php/GJMBR/article/view/1217

Free Cash Flow and Earnings Management in Brazil: The Negative Side of Financial Slack

Published

2014-01-15