Corporate Social Responsibility and Earnings Management: Between Ethical Commitment and Managerial Opportunism

Abstract

This study examines why corporate social responsibility (CSR) is associated with both lower and higher earnings management (EM). A structured integrative literature review was conducted using a curated corpus of 25 publications published between 2012 and 2026. The data were collected through a purposive selection of relevant empirical and review studies, and analyzed using descriptive mapping, thematic coding, and comparative synthesis. The studies were coded according to CSR construct, EM measure, theoretical mechanism, research design, reported direction, and contextual conditions. The synthesis distinguishes CSR performance from CSR disclosure, substantive commitment from symbolic communication, and accrual-based earnings management (AEM) from real earnings management (REM). The evidence supports two competing pathways. In the ethical-integrity pathway, substantive CSR strengthens stakeholder accountability, long-term orientation, reporting transparency, and accounting conservatism, thereby constraining EM. In the symbolic-obfuscation pathway, managers use CSR activity, disclosure intensity, or optimistic narrative tone to build legitimacy, divert scrutiny, and conceal opportunistic reporting. The apparent contradiction is partly methodological: disclosure-based CSR measures are more likely to capture symbolic behavior, while AEM and REM may move in different directions because managers substitute between techniques with different visibility and economic costs. Corporate governance, investor protection, legal enforcement, external assurance, accounting conservatism, CEO incentives, industry exposure, and economic shocks determine which pathway dominates. The review develops a dual-pathway framework and concludes that CSR cannot be treated automatically as evidence of financial reporting integrity. Future studies should jointly measure substantive and symbolic CSR, examine AEM and REM simultaneously, and employ longitudinal and endogeneity-aware designs.

Keywords: Corporate Social Responsibility, Earnings Management, Corporate Governance, Greenwashing, Financial Reporting Quality.