The impact of ERP utilization and ESG practices on earnings management—An empirical study of Taiwan

Hsing-Hua Hsiung, Ya-Hsin Chen

Article ID: 2525
Vol 8, Issue 3, 2024

VIEWS - 293 (Abstract) 181 (PDF)


Enterprise Resource Planning (ERP) system utilization and Environmental, Governance, Social (ESG) practice incorporation have jointly wielded significant influence on various aspects of accounting operations. On the other side, leveraging the robust information infrastructure, Taiwanese firms have widely implemented ERP systems and have been aligning with international ESG initiatives in recent years. The objective of this study is to investigate the impact of ERP utilization and ESG practices on real and accrual earnings management among firms listed in Taiwan over an 19-year span from 2003 to 2021. The results of this study suggest duration of ERP implementation has a negative impact on accruals earnings management, but has a positively influence on real management. The results underscore the significant influence of ERP utilization duration on the different aspects of corporate earnings management activity. Additionally, our investigation illustrates a negative association between the corporate assimilation of ESG practices and both real and accrual earnings management. This reveals that enterprises committed to implementing ESG practices highlight long-term substantive operations over the short term periodic performance of financial statements.


ESG; ERP; sustainable development goals; accrual earnings management; real earnings management

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