Stability of profits and earnings management in the transport sector of Visegrad countries




business profit, earnings management, stationarity, transport sector, Visegrad four


Research background: Business profit and its stable development are key performance indicators. Many enterprises performed earnings manipulation, either upward or downward, according to the current business and macroeconomic situation, as well as time. These activities may interrupt the stationarity of time series. This article focuses on the transport enterprises, and the assessment of bonds in their earnings.

Purpose of the article: The target of the article was to identify the occurrence of non-stationary and its unit root in the EBITDA of transport enterprises for each country in V4 during the period of 2010?2019.

Methods: The stationarity and unit roots in time series were tested by the Kwiatkowski, Phillips, Schmidt, and Shin tests and the Augmented Dickey-Fuller based on the samples of 470 Slovak, 405 Czech, 774 Polish, and 1,056 Hungarian. The behavior of earnings manipulation (the first cause of non-stationarity) was indicated by the Modified Jones model. Additional causes for non-stationarity were confirmed by the regression analysis, including factors such as the GDP, unemployment rate, average monthly gross wage, and the Ease of doing business index.

Findings & value added: The non-stationarity in the time series of EBITDA was disclosed for each country in the V4 region. Earnings management was discovered to be the cause of this erratic development. Thus, the value-added for the authorities and auditors is to show the association between non-stationary and creative accounting. In addition, purposeful downward manipulation in the transport sector occurs, not upward, which is typical in general. The methodology used in the study may be applied cross-sectorally in emerging countries. The labelling of specific macroeconomic variables depending on the country offers enterprises the opportunity to focus on factors with a crucial influence on their existence and activities.


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How to Cite

Kliestik, T. ., Novak Sedlackova, A. ., Bugaj, M. ., & Novak, A. . (2022). Stability of profits and earnings management in the transport sector of Visegrad countries. Oeconomia Copernicana, 13(2), 475–509.