Firms’ Cybersecurity and Managerial Opportunistic Practices: Future Directions

Due to the escalating risk and exposure associated with the cyber world,cybersecurity has emerged as a crucial concern on a global scale. Since data breachesare viewed as undesirable events, managers are motivated to engage in differentearnings management practices to avoid the negative consequences of data breaches.Surprisingly, despite the well-established earnings management prior research, fewstudies have investigated the relationship between cybersecurity level and earningsmanagement practices. However, testing this association is crucial because, if firmswith low levels of cybersecurity engage in more opportunistic earnings managementpractices to cover their cybersecurity weaknesses, this could lead to severe futurelosses. This study act as a foundation for subsequent research as it suggests a numberof potential research topics. Regulators, investors, and corporate management canlearn from the findings of this study about the link between firms’ cybersecurity andearnings management practices.