[...]... Conclusion In this paper, we examine the association between earnings management and information asymmetry considering environmental complexity and dynamism Our findings suggest that investors have difficulty to detect earnings management in such contexts As expected, findings show that the association between earnings management and information asymmetry is reduced for firms facing complexity and dynamism... affect asymmetry in the stock market Acknowledgements We thank the fund for education and good governance of the Autorité des marchés financiers (Québec) and PWC for financial support Information, opinions and views expressed in this article are the sole responsibility of the authors The content of this article does not necessarily reflect the opinion of the Authority and PWC; any errors are the responsibility... capture the underlying phenomenon More specifically, the relationship between discretionary accruals and information asymmetry is likely to be driven by the variation in the underlying economic of the firm In a context of environmental uncertainty where variations in firms’ specific economic factors are likely to be high, results can reflect the difficulty to measure discretionary accruals rather than the market’s... diversification and earnings management: Evidence from seasoned equity offerings Review of Quantitative Finance and Accounting, 30(1), 69–92 Liu, M., & Wysocki, P (2007) Cross-sectional determinants of information quality proxies and cost of capital measures, AAA 2008 Financial Accounting and Reporting Section (FARS) SSRN: http://ssrn.com/abstract=1013652 McNichols, M (2002) Discussion of the quality of accruals... disclosure policy and analyst behavior The Accounting Review, 71(4), 467–492 Leblebici, H., & Salancik, G R (1981) Effects of environmental uncertainty on information decision processes in banks Administrative Science Quarterly, 26(December), 578–596 Leuz, C., Nanda, D., & Wysocki, P (2003) Earnings management and investor protection: An international comparison Journal of Financial Economics, 69(3),... less earnings management, suggesting that the board of directors plays a monitoring role Corporate governance may restrain earnings management in a country like Canada where the ownership is highly concentrated The results of this study should be interpreted with caution for at least the following reason Like all earnings management studies, the present study relies on a specific measure of discretionary... Accounting Review, 80(1), 21–53 Burgstahler, D., Hail, L., & Leuz, C (2006) The importance of reporting incentives: Earnings management in European private and public firms The Accounting Review, 81(5), 983–1016 Chang, J.-C., & Sun, H.-L (2009) Crossed-listed foreign firms’ earnings informativeness, earnings management and disclosures of corporate governance information under SOX The International Journal of. .. accruals and earnings: The role of accrual estimation errors The Accounting Review, 77(Suppl.), 61–69 Megginson, W., Morgan, A., & Nail, L (2004) The determinants of positive long term performance in strategic mergers: Corporate focus and cash Journal of Banking and Finance, 28(3), 523–552 Mikhail, M., Walther, B., & Willis, R (2004) Earnings surprises and the cost of equity capital Journal of Accounting,... Journal of Accounting, Auditing and Finance, 19(4), 491–513 Milliken, F J (1987) Three types of perceived uncertainty about the environment: State, effect, and response uncertainty Academy of Management, 12(1), 133–143 38 D Cormier et al / Journal of International Accounting, Auditing and Taxation 22 (2013) 26–38 Mintzberg, H (1979) The structuring of organizations: A synthesis of the research Englewood... (1992) Financial disclosure levels and foreign stock exchange listings Journal of International Financial Management and Accounting, 4(2), 106–148 Saudaragan, S., & Meek, G (1997) A review of research on the relationship between international capital markets and financial reporting by multinational firms Journal of Accounting Literature, 16, 127–159 Schipper, K (1989) Commentary on earnings management . Accounting, Auditing and Taxation The incidence of earnings management on information asymmetry in an uncertain environment: Some Canadian evidence Denis Cormier ∗ , Sylvain . engage in earnings management with an assessment of the incidence on information asymmetry, this study contributes to the understanding of earnings management . Elsevier Inc. 1. Introduction In this paper, we investigate the association between earnings management and information asymmetry considering environmental uncertainty.