Our study analyses the relationship between the level of earnings management and the debt of unlisted companies in two countries liable to economic adjustment programmes – Portugal and Ireland – between 2008 and 2016. We also analyse whether there are differences between both countries in what results are concerned. In a sample of 970 unlisted companies, and according the discretionary accruals, we find evidence of a positive relationship between the level of debt and the level of earnings management, thus concluding that the level of this relationship is different in each country. We also demonstrate that during the period of time in which the financial support occurred, there was mitigation in the relationship between the level of earnings management and indebtedness.

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Earnings management,Adjustment Programmes,Portugal,Ireland