Manipulation of earnings reports in Spain ‐ Some evidence Available to Purchase

Accounting regulation is a highly topical issue for listed companies in Europe. From 1 January 2005 all companies listed in the EU member states have been required to produce financial reports compliant with international accounting standards. Financial reports will be comparable with each other only if full compliance with the international standards can be ensured. Historically, however, an enduring weakness of the international standard‐setting regime has been its inability to enforce compliance with its standards. There is a danger that implementation and compliance will be variable across the adopting countries, and that deeply ingrained national reporting practices will persist. Where such practices include a high incidence of earnings management techniques and behaviours, any improvement in the quality of reported financial information may be slow to materialise.