The relation of corporate social responsibility, earnings management and financial performance according to accounting information quality

Corporate social responsibility conception expresses constructive implementations for stakeholders, society and natural environment. A reflection of this conception in business can be expressed as to prepare and present reliable financial statements. On the other hand, earnings management causes delusive reporting by manipulating accounting transactions and thus, it decreases accounting information quality. Both implementations of corporate social responsibility and earnings management influence the financial performances of business or they are influenced by this performance. Thus, the purpose of this study is to reveal the relation between corporate social responsibility, earnings management and financial performance, according to accounting information quality. In this study, a research has been planned for being tested hypothesis that occurred in the light of aim above, required data for research in point, has been collected from financial statements, annual reports, corporate governance compliance reports and social responsibility reports that were published by 81 industrial business, whose stocks were traded in Borsa Istanbul (BIST) Industrial index, between the years of 2005-2012. The data set has been generated by making 648 observations for every data groups and this data set has been examined by panel data analysis method, in the context of research models. According to research findings; it may be asserted that corporate social responsibility implementations restrict earnings management in business and therefore accounting information quality will be able to increase because of this restriction. Findings refer that, increase in financial performance enhances earnings management. Additionally auditing challenges, profit growth and increase in borrowing raise earnings management. However, it has been determined that ownership concentration may reduce the earnings management in investigated business. Moreover, it couldn't be determined a meaningful relation between corporate social responsibility and financial performance. Keywords: Corporate Social Responsibility, Earnings Management, Accounting Information Quality, Financial Performance