Can investors rely on the quality of earnings figures published by listed and non-listed Russian firms?

This paper investigates earnings quality of both listed and non-listed Russian firms and explores whether foreign ownership affects the quality of earnings published by non-listed Russian firms. Russia, the largest European transitional economy, is an increasingly attractive market for foreign investors. Our empirical results show that Russian firms listed on a stock exchange report earnings of relatively good quality. We do not find support for the hypothesis that non-listed Russian firms co-owned by foreign investors report earnings of better quality than do exclusively Russian-owned non-listed firms. However, we find that non-listed Russian firms with foreign ownership report earnings with more timely recognition of economic gains than exclusively Russian-owned non-listed firms do. Our results are robust for different specifications of the earnings quality model.