Date of Award


Document Type

Campus Access Thesis

Degree Name

Master of Science (MS)



First Advisor

Surjit Tinaikar

Second Advisor

Atreya Chakraborty

Third Advisor

Lucia Gao


The introduction of the Companies Act, 2013 in India was an important piece of legislation that changed the nature of financial reporting in India. It was introduced with effect from the financial year 2014-2015. As a part of this legislation, several reform measures were adopted to improve the corporate governance among Indian companies in an attempt to improve the quality of reporting. This study therefore analyzes the effect of this legislation on the level of earnings management over the period 2009 through 2019 using three different earnings management measures. It finds evidence that earnings management declined in Indian companies after the implementation of the Companies Act, 2013. To examine whether such earnings management was widespread or limited I also examine whether this earnings management decline was observed in environments where the propensity to engage in earnings management is high. The two environments were a) industries historically been known to manipulate financial reports b) companies with high realizations of free cash flow and thus higher incentives to divert resources and conceal them through earnings manipulation. I find little or weak evidence of earnings management having declined after the introduction of the Companies Act, 2013 in these environments. This evidence therefore also throws light on the limited success of the Companies Act, 2013 in mitigating earnings manipulation. Future studies should explore this issue further by using more targeted and diverse industry-specific earnings management measures to measure the true impact of the Companies Act, 2013.


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