From reporting to responsibility: investigating the influence of sustainability disclosure on earnings management

This study meticulously reviews the intricate relationship between sustainability disclosures and earnings management, exploring contextual dimensions that satisfy the internal (ownership structure and corporate governance) and external stakeholders' concerns (information asymmetry, transparency, corporate reputation). Furthermore, the study also review the impact of carbon disclosures on earnings management in the context of gender diversity. Lastly, the research reviews the effects of sustainability on real, accrual, and discretionary accrual earnings management, shedding light on firms' preferences for specific types of earnings management practices. A systematic review method is accepted to carefully examine these dynamics, demanding a meticulous search of pertinent literature through Scopus while adhering to stringent inclusion criteria. This comprehensive process yields a curated selection of 145 studies in the English language published from 2008 to 2023, establishing a robust foundation for this review and formulating a map for the knowledge produced and disseminated in preceding examinations. The impact of this research is underscored by its contribution to advancing understanding across several measurements. The results significantly enhance understanding of how sustainability effects various facets of earnings management, offering a comprehensive framework for future research propositions. Moreover, the study extends organized and stakeholder theories, providing pronouncement support for entities in their sustainability and earnings management approach. The findings have practical implications, assisting practitioners and researchers in exactly interpreting the interplay between sustainability and financial practices. This research is a seminal contribution to the field, comprehensively exploring the intricate relationships between sustainability, earnings management, and their multifaceted influences. It is an invaluable resource for scholars, policymakers, and practitioners, fostering a deeper understanding of the evolving landscape where sustainability and financial practices intersect.