Has Ind‐AS adoption affected earnings management in India?

The current study provides empirical evidence on how Indian Accounting Standards (Ind‐AS hereinafter) adoption has affected earnings management (EM hereinafter) in India. The study uses the Beneish Model and Modified Jones model to detect EM. The sample of the study comprises 240 companies listed in the S&P BSE MidSmallCap index for the period 2013–2019. The results of the Modified Jones model reveal that Ind‐AS have no significant effect on EM. However, the Beneish model shows that all ratios except leverage index have a significant relationship with EM after Ind‐AS adoption. Nine industries out of 28 sample industries are suspectable to indulge in manipulating financial statements. The ratio of manipulators to nonmanipulators has grown after Ind‐AS adoption. The paper adds to the literature by examining the impact of new accounting standards on EM in an emerging economy. The findings of the study would be relevant to the public accounting bodies, regulators, accounting professionals, and the public at large. [ABSTRACT FROM AUTHOR]