Analysis of the income smoothing degrees behavior by operational decisions in the context of the corporate sustainability index

Abstract

The objective of this study is to analyze the behavior of degrees of smoothing income through operational decisions of non-financial companies listed on the BM & FBOVESPA, among which, companies that were part of the Corporate Sustainability Index (ISE) portfolio from 2005 to 2015. Detection of income smoothing by operational decisions occurs through regression residuals (errors), which represent an abnormal level of the company’s actual activities, thus being a proxy for this form of management (PAULO, 2007). It is an exploratory study, in which the income smoothing proxies whose behaviors are analyzed here, become the dependent variables on the confirmatory part of the research, discussed in another scientific article. In a review of the literature on this subject, it was verified that there is a gap in research on income smoothing in the context of corporate sustainability. Thus, for the accomplishment of this study, a sample of 204 companies was used, from 2005 to 2015, and collected through the Comdinheiro system. For the operationalization of the research, a qualitative analysis was adopted, in which it calculated the degree of income smoothing through operational decisions and verified its behavior through graphic analysis. The results suggest that the companies included in the ISE portfolio present higher degrees of management of results by operational decisions, corroborating the findings in the study by Silva (2014).