1.4　Main empirical results

The first empirical chapter reveals that private firms are more likely to engage in earnings manipulation than public firms.This finding is consistent with the prior study of Burgstahler et al.（2006） which compared the level of EM in private and public firms from the European countries for an earlier sample covering the period between 1997-2003.The finding also showed that the effects of IFRS and financial crisis in lowering EM is more pronounced for public firms than for private firms.Further，country-level factors and country characteristics，including legal enforcement，investor protection rules and tax rates，are also important determinants of EM.It therefore suggested that standard-setters should consider some country-level variables to better guarantee the quality accounting information across countries.

The second and third empirical chapter examine EM activities through firm-level.The second chapter demonstrates that public firms，in general，have higher accrual quality and report more conservatively compared to private firms.This finding is consistent with a prior study of Hope et al.（2013） that compared financial reporting quality between US private and public firms.The result is also consistent with the “demand” hypothesis，that public firms face greater demand for higher quality financial information from investors and other shareholders compared to private firms.However，the greater accrual quality of public firms is mitigated，when firms （1） only beat an earnings benchmark by reporting a small profit or a small increase in earnings，（2） obtain external financing in the subsequent year and （3） do not employ a Big Four auditor，the greater conservatism of public firms relative to private firms decreases for firms that （1） just beat earnings benchmarks and （2） have lower leverage.Moreover，public firms exhibit a lower level of EM in the post-IFRS adoption period than the pre-IFRS adoption period，which supports the view that IFRS has reduced the degree of EM in public firms.[7]

The third empirical chapter shows that private firms overall engage in less EM through real operating activities.This finding is consistent with a prior study of Haga et al.（2015），comparing the extent of REM between UK private and public firms.The empirical findings also suggest that mandatory IFRS adoption and financial crisis had no significant impact on the level of REM.This is contrary to those findings obtained in the previous two chapters，which suggest that IFRS adoption has a negative effect on firms’ EM.Real economic actions are more difficult to audit than firms’ accounting choice，which therefore suggests that standard-setters should improve some standards in order to better capture the real activities manipulations.Furthermore，it suggests that the differential EM between private and public firms can vary in settings that differentially affect public and private firms’ incentives to manage earnings，and find that public firms，overall，face stronger incentives to manage earnings than do private firms’ managers in some settings.These settings include situations when earnings targets are to be beaten，and where firms’ leverage is high.It can be concluded that firm-level incentives play a more important role in shaping firms’ REM than regulatory change （i.e.，IFRS adoption）.