What Have We Learned About Earnings Management? Integrating Discontinuity Evidence
35 Pages Posted: 20 Jun 2011 Last revised: 18 Jul 2015
Date Written: March 30, 2015
Abstract
The accounting literature includes numerous examples of discontinuities at prominent benchmarks that are widely interpreted as evidence that earnings are managed to meet those benchmarks. However, there are also a few examples where discontinuities do not exist, which are sometimes interpreted as inconsistent with earnings management. There are also several suggested alternative explanations for discontinuities. This paper reviews and integrates the various elements of the body of discontinuity-related evidence.
Keywords: earnings management, discontinuities
JEL Classification: G14, M40
Suggested Citation: Suggested Citation
Do you want regular updates from SSRN on Twitter?
Recommended Papers
-
Detecting Earnings Management: A New Approach
By Patricia Dechow, Amy P. Hutton, ...
-
A Review of the Earnings Management Literature and its Implications for Standard Setting
-
Errors in Estimating Accruals: Implications for Empirical Research
By Daniel W. Collins and Paul Hribar
-
The Economic Implications of Corporate Financial Reporting
By John R. Graham, Campbell R. Harvey, ...
-
The Economic Implications of Corporate Financial Reporting
By John R. Graham, Campbell R. Harvey, ...
-
On the Association between Voluntary Disclosure and Earnings Management
By Ron Kasznik
-
Performance Matched Discretionary Accrual Measures
By S.p. Kothari, Andrew J. Leone, ...
-
The Quality of Accruals and Earnings: The Role of Accrual Estimation Errors
By Ilia D. Dichev and Patricia Dechow