Corporate social responsibility spending and earnings management: The moderating effect of ownership structure

The present study investigates the moderating influence of ownership structure on the association between corporate social responsibility (CSR) and earnings management of non-financial corporations listed on 100 Index of the Bombay Stock Exchange. The study utilizes a panel data derived from Prowess IQ for the 100 Index listed firms for the period from 2015 to 2020. The results indicate that CSR spending is linked with real earnings management in the contexts where there is a dominant domestic controlling shareholder and founder ownership, but not in the context of institutional or foreign ownership. The results also exhibit that higher levels of foreign ownership weaken the relationship between CSR spending and earnings management activities. The current study provides valuable insights for regulators, policymakers, board members, auditors, analysts, and acade-micians into a number of issues concerning earnings management activities and stakeholders' engagement. Stakeholders' engagement mechanisms that include responsible parties encompassing regulatory authorities, external and internal auditors, shareholders, and board monitoring should be enhanced to support the notion of ethical and responsible practices. The results help settle the debate that was caused by finding different things about the link between disclosing CSR performance and managing earnings with ownership structure as a moderator.