Earnings management in public hospitals: The case of Greek state-owned hospitals

IMPACT This article has multiple implications for state-owned hospitals. The authors show that state-owned hospitals will try to meet the financial targets required by the supervisory authorities. When the central government expects a certain financial outlook, hospitals will manage their accounts to comply with these expectations. Oversight authorities and legislators need to be aware of this tendency and its implications for audits. The article identifies the factors that affect the manipulation of earnings so that strategies can be set to predict and avoid such behaviours.