Earnings Management and Business Valuation: An Analysis of the Relevance of Discretionary Accruals in the Ohlson Model

The aim of this paper consisted to check the reflection of earnings management (discretionary accruals) on the of evaluation of public brazilian companies, in the period from 2012 to 2017. We analyzed 1,170 observations, with an average of 200 companies per year. The estimation of the earnings management (EM) was performed by Dechow et al. (2012). The value relevance of earnings management was then analyzed by the Ohlson model (1995). The main findings confirmed that there is heterogeneous between the sample data, justifying the use of quantile regression. In additional findings to other research, with regard to the increase of the value relevance of the Ohlson model (1995), the EM has shown importance among the companies of medium and higher market value, indicating that earings management affects the pricing of these Firms.