Convergence of Accounting Standards to International Standards and Earnings Management in Brazilian Companies

This chapter sought to highlight the main challenges of the initial adoption of accounting standards converged to international standards applied to public companies and treasury-dependent companies and how the results of economic agents in public and private companies in Brazil are managed. Relevant legislation, norms, pronouncements, interpretations, and guidelines of competent bodies were analyzed through bibliographical and documentary research. The results demonstrated that between the two processes of accounting convergence to which such entities must submit, there are conflicts of terms and technical accounting procedures to assist these entities to the process of accounting convergence. Regarding earnings management, it was found that there is an earnings management in both sectors; however, the public sector reaches a high number of citizens, while the private sector is limited to stakeholders; however, both sectors, in some cases, multiplicity of components of the public sector, resembles the private sector.