Publicação
The impact of data security breaches on earnings management
| Resumo: | Nowadays, the increasing volume of big data and the time spent by all everyone online increased the risk to incur in cybersecurity incidents. This phenomenon is affecting both investors and firms, thus it is relevant to understand how the latter are behaving to respond to this risk. Although these events are usually caused by deficiencies in internal controls and supervision, the truth is that corporate management has been concerned about how these security breaches can impact a company performance. The manipulation of financial results could represent a motivation to camouflage undesirable outcomes, financial losses and to report a legitimate image of the firm's results, to investors and to other stakeholders. Thus, to test whether the company affected by data breaches implemented earnings management policies, we analysed a sample of US public companies. The main idea is to understand whether the entities which suffered damages caused by a data breach incident take the opportunity to manipulate the financial results at least to recover damages. Further, we examine how investor’s attention affects the impact of data security breaches on earnings management. Results of the empirical analysis demonstrate that data security breaches do not affect earnings management and investor’s attention does not affect the impact of a data breach accident on earnings management. |
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| Autores principais: | Babo, Ana Beatriz Barbosa Macedo |
| Assunto: | Earnings management Data security breach Investor’s attention Corporate disclosure Manipulação de resultados Violação de segurança de dados Atenção dos investidores Divulgações |
| Ano: | 2022 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade Católica Portuguesa |
| Idioma: | inglês |
| Origem: | Veritati - Repositório Institucional da Universidade Católica Portuguesa |
| Resumo: | Nowadays, the increasing volume of big data and the time spent by all everyone online increased the risk to incur in cybersecurity incidents. This phenomenon is affecting both investors and firms, thus it is relevant to understand how the latter are behaving to respond to this risk. Although these events are usually caused by deficiencies in internal controls and supervision, the truth is that corporate management has been concerned about how these security breaches can impact a company performance. The manipulation of financial results could represent a motivation to camouflage undesirable outcomes, financial losses and to report a legitimate image of the firm's results, to investors and to other stakeholders. Thus, to test whether the company affected by data breaches implemented earnings management policies, we analysed a sample of US public companies. The main idea is to understand whether the entities which suffered damages caused by a data breach incident take the opportunity to manipulate the financial results at least to recover damages. Further, we examine how investor’s attention affects the impact of data security breaches on earnings management. Results of the empirical analysis demonstrate that data security breaches do not affect earnings management and investor’s attention does not affect the impact of a data breach accident on earnings management. |
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