Management controls and behavioral factors as drivers of earnings management

The use of management control levers can help organizations to assess results and minimize opportunistic behavior by managers. It can shape behavioral factors by providing a trigger, on occasion, to earnings management practices. The aim of the study is to analyze whether the use of management control levers affects the relationship between the behavioral factors of empowerment and creativity of managers and the propensity for earnings management. The sample is composed of 82 respondents (managers of Brazilian companies), for data processing, the structural equation was used. The results suggest that companies that prioritize the use of management control levers by threshold and diagnostic systems create barriers to earnings management practices. On the other hand, companies with the use of management control levers through belief and interactive systems make room for managers to exercise the opportunistic behavior of earnings management.