Is short term debt maturity linked to real earning management?

This paper explores the association between the maturity of short term debt and real earnings management in the context of an emerging market. We use a panel dataset of listed firms in Vietnam over the period from 2009 to 2017 and employ conventional methods for panel data analysis. Our work contributes by documenting a non-linear relationship between short-term debt maturity and manipulation of earnings. In particular, businesses prefer to refrain from manipulating earnings at low short-term debt maturity levels but are likely to manage them at higher short-term debt maturity levels. Under a battery of robustness evaluations, this result remains unchanged. This means that investors/lenders of firms should be vigilant with the information recorded on financial statements because managers can manage corporate earnings, especially at high short-term debt levels.