Author: Amy Zang
Publisher:
ISBN:
Category :
Languages : en
Pages : 46
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Book Description
I study whether managers use real and accrual manipulations as substitutes in managing earnings, and I study the order that managers make these decisions. I find that managers determine real manipulation before accrual manipulation. Based on this result, I use an empirical model that captures the sequentiality of real and accrual manipulations to test the tradeoffs between the two. The results of the broad sample tests are consistent with managers using real and accrual manipulations as substitutes. In a small sample test examining firms subject to securities class action lawsuits, I examine whether real and accrual manipulations change over time with changes in litigation risk. Consistent with managers using real and accrual manipulations as substitutes, I find that managers switch from accrual manipulation to real manipulation after lawsuit filings.
Author: Amy Yunzhi Zang
Publisher:
ISBN:
Category : Decision making
Languages : en
Pages : 220
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Book Description
Author: Amy Yunzhi Zang
Publisher: ProQuest
ISBN: 9780549163251
Category :
Languages : en
Pages : 120
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Book Description
Author: Daniel A. Cohen
Publisher:
ISBN:
Category :
Languages : en
Pages : 49
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Book Description
We examine earnings management behavior around SEOs, focusing on both real activities and accrual-based manipulation. Although research has addressed the issues of earnings management around SEOs and earnings management via real activities manipulation, ours is the first paper to put these two issues together. We make three contributions to the literature. First, we document that firms use real, as well as accrual-based, earnings management tools around SEOs. Second, we show how the tendency for firms to tradeoff real versus accrual-based earnings management activities around SEO s varies cross-sectionally. We find that firms choices vary predictably as a function of the firm s ability to use accrual management and the costs of doing so. Our model is a first step in examining how firms tradeoff between real versus accrual methods of earnings management. Third, we compare the economic costs of accrual versus real earnings management around SEO s, by examining the effect of each type of earnings management on the firm s future performance. We provide the first evidence on this important issue by showing that the costs of real earnings management are likely greater than the costs of accrual earnings management, at least in the SEO context.
Author: Malek El Diri
Publisher: Springer
ISBN: 3319626868
Category : Business & Economics
Languages : en
Pages : 120
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Book Description
This book provides researchers and scholars with a comprehensive and up-to-date analysis of earnings management theory and literature. While it raises new questions for future research, the book can be also helpful to other parties who rely on financial reporting in making decisions like regulators, policy makers, shareholders, investors, and gatekeepers e.g., auditors and analysts. The book summarizes the existing literature and provides insight into new areas of research such as the differences between earnings management, fraud, earnings quality, impression management, and expectation management; the trade-off between earnings management activities; the special measures of earnings management; and the classification of earnings management motives based on a comprehensive theoretical framework.
Author: Joshua Ronen
Publisher: Springer Science & Business Media
ISBN: 0387257713
Category : Business & Economics
Languages : en
Pages : 587
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Book Description
This book is a study of earnings management, aimed at scholars and professionals in accounting, finance, economics, and law. The authors address research questions including: Why are earnings so important that firms feel compelled to manipulate them? What set of circumstances will induce earnings management? How will the interaction among management, boards of directors, investors, employees, suppliers, customers and regulators affect earnings management? How to design empirical research addressing earnings management? What are the limitations and strengths of current empirical models?
Author: Alberto Chong
Publisher: World Bank Publications
ISBN: 0821369148
Category : Business & Economics
Languages : en
Pages : 584
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Book Description
'Investor Protection and Corporate Governance' analyzes the impact of corporate governance on firm performance and valuation. Using unique datasets gathered at the firm-level the first such data in the region and results from a homogeneous corporate governance questionnaire, the book examines corporate governance characteristics, ownership structures, dividend policies, and performance measures. The book's analysis reveals the very high levels of ownership and voting rights concentrations and monolithic governance structures in the largest samples of Latin American companies up to now, and new data emphasize the importance of specific characteristics of the investor protection regimes in several Latin American countries. By and large, those firms with better governance measures across several dimensions are granted higher valuations and thus lower cost of capital. This title will be useful to researchers, policy makers, government officials, and other professionals involved in corporate governance, economic policy, and business finance, law, and management.
Author: Ralf Ewert
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 142
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Book Description
Earnings Management, Conservatism, and Earnings Quality reviews and illustrates earnings management, conservatism, and their effects on earnings quality in an economic modeling framework. Both earnings management and conservative accounting introduce biases to financial reports. The fundamental issue addressed is what economic effects these biases have on earnings quality or financial reporting quality. Earnings Management, Conservatism, and Earnings Quality reviews analytical models of earnings management and conservatism and shows that both can have beneficial or detrimental economic effects, so a differentiated view is appropriate. Earnings management can provide additional information via the financial reporting communication channel, but it can also be used to misrepresent the firm's position. What the authors find is that similar to earnings management, conservatism can reduce the information content of financial reports if it suppresses relevant information, but it can be a desirable feature that improves economic efficiency. The approach to study earnings management, conservatism, and earnings quality is based on the information economics literature. A variety of analytical models are reviewed that capture the effects and subtle interactions of managers' incentives and rational expectations of users. The benefit of analytical models is to make precise these, often highly complex, strategic effects. They offer a rigorous explanation for the phenomena and show that sometimes conventional wisdom does not apply. The monograph is organized around a few basic model settings, which are presented in simple versions first and then in extensions to elicit the main insights most clearly. Chapter 2 presents the basic rational expectations equilibrium model with earnings management and rational inferences by the capital market. Chapter 3 is devoted to earnings quality and earnings quality metrics used in many studies. Chapter 4 studies conservatism in accounting. Finally, the authors examine the interaction between conservatism and earnings management. Each chapter ends with a section containing a summary of the main findings and conclusions.
Author: Ross L. Watts
Publisher:
ISBN: 9789867491138
Category : Accounting
Languages : en
Pages : 388
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Book Description
Author: El Mahdy, Ph.D. (CFE, Dina)
Publisher:
ISBN:
Category :
Languages : en
Pages : 48
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Book Description
Following Cohen and Zarowin (2010), this study examines management's choices between alternative earnings management mechanisms applied to a specific corporate finance event. Specifically, this study examines the tradeoff between accrual-based earnings management (AEM) and real activities manipulation (RAM) prior to syndicated loan origination. This study also tests whether lenders' monitoring mechanisms result in any differential effects on future earnings management activities. The syndicated loan market bridges the private and public fixed-income markets and provides a unique setting to test the choices of earnings management mechanisms. Using a propensity score matched sample of syndicated versus bilateral loans originated between 1989 and 2005, we predict and find empirical evidence that while syndicated loan borrowers are likely to manipulate accounting earnings prior to the origination of syndicated loans, they draw more heavily on AEM than on RAM. Further analysis suggests that syndicate lenders' monitoring mechanisms -- such as reputable lenders, number of syndication, loan size and loan maturity -- are significantly associated with the future changes of AEM activities; the effect on the future changes of RAM activities is less significant.
