The results suggest several practical implications. Stakeholders should consider how voluntary delisting decisions will impact financial reporting practices upfront of announcements in an effort to make more informed strategic decisions and higher assess the reliability of monetary reports.
Although the earnings management observed here, whether through IFRS-approved accounting options or through adjustments to actual operations, will not be illegal, it nonetheless reflects opportunistic management behavior by corporations preparing to delist.
Regulators will want to strengthen disclosure standards to be certain that financial reports more accurately reflect corporations’ performance before delisting. Financial analysts and advisors can incorporate the earnings management impact of delisting decisions into their assessments and client recommendations.
Most previous studies on earnings management prior to voluntary delistings deal with the United States and the United Kingdom. By examining European corporations, this research expands the geographical scope of the literature and increases the relevance of earnings management insights. The evaluation integrates perspectives from accounting, corporate finance, corporate governance and law to offer a more comprehensive view of earnings management.
Taken together, the outcomes highlight how management decisions influence financial reporting and market reactions to voluntary delistings in Europe, providing each a broader understanding of earnings management and practical insights for investors and regulators
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