Corporate Governance And Accruals Earnings Management

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Corporate Governance and Accruals Earnings Management

Author : Leonidas C. Doukakis
Publisher :
ISBN 13 :
Total Pages : 49 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Corporate Governance and Accruals Earnings Management by : Leonidas C. Doukakis

Download or read book Corporate Governance and Accruals Earnings Management written by Leonidas C. Doukakis and published by . This book was released on 2014 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the association between corporate governance and accruals earnings management using a Corporate Governance Index (CGI) consisting of 55 individual corporate governance measures. Prior literature has focused primarily on certain individual corporate governance measures, overlooking the multidimensional character of corporate governance. Based on a sample of firms listed on the Athens, Milan and Madrid Stock Exchanges, we find an inverse relationship between corporate governance and earnings management. Corporate governance provisions seem to constrain the tendency of management to manage earnings leading to higher credibility for financial statements. Additional tests suggest that the negative relationship holds for large and middle capitalization firms, but not for the small capitalization sample. In addition, corporate governance provisions limit upwards but not downwards earnings management. This study emphasizes the multilevel character of corporate governance and suggests the usage of comprehensive measures of corporate governance in the academic research. This study also stresses the importance of introducing corporate governance mechanisms in order to ensure the integrity of the financial reporting process. Practitioners are expected to evaluate the corporate governance provisions that each firm has put in place while policy makers are expected to mandate the application of a wide range of corporate governance mechanisms.

Introduction to Earnings Management

Author : Malek El Diri
Publisher : Springer
ISBN 13 : 3319626868
Total Pages : 120 pages
Book Rating : 4.3/5 (196 download)

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Book Synopsis Introduction to Earnings Management by : Malek El Diri

Download or read book Introduction to Earnings Management written by Malek El Diri and published by Springer. This book was released on 2017-08-20 with total page 120 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Comparative Research on Earnings Management, Corporate Governance, and Economic Value

Author : Vieira, Elisabete S.
Publisher : IGI Global
ISBN 13 : 1799875989
Total Pages : 433 pages
Book Rating : 4.7/5 (998 download)

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Book Synopsis Comparative Research on Earnings Management, Corporate Governance, and Economic Value by : Vieira, Elisabete S.

Download or read book Comparative Research on Earnings Management, Corporate Governance, and Economic Value written by Vieira, Elisabete S. and published by IGI Global. This book was released on 2021-02-12 with total page 433 pages. Available in PDF, EPUB and Kindle. Book excerpt: New trends are emerging regarding earnings management and corporate governance showing similarities and striking differences in the practices of different countries and economies. These new trends currently shape the field of modern corporate governance with crucial issues being looked at in governance law and practices, accounting systems, earnings quality and management, stakeholder involvement, and more. In order to advance these new avenues in corporate governance, research looks at accounting policies firms use in different opportunistic circumstances in order to manage earnings, the corporate governance practices in different countries, firm performance, and other dimensions of companies. The understanding of these topics is beneficial in understanding the current state of different types of firms and their practices in modern times. Comparative Research on Earnings Management, Corporate Governance, and Economic Value is focused on the investigation of key challenges and perspectives of corporate governance and earnings management and outlines possible scenarios of its development. The chapters explore this new avenue of research and cover theoretical, empirical, and experimental studies related to different themes in the global context of earnings management and corporate governance. This book is ideal for economists, businesses, managers, accountants, practitioners, stakeholders, researchers, academicians, and students who are interested in the current issues and advancements in corporate governance and earnings management.

Corporate Payout Policy

Author : Harry DeAngelo
Publisher : Now Publishers Inc
ISBN 13 : 1601982046
Total Pages : 215 pages
Book Rating : 4.6/5 (19 download)

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Book Synopsis Corporate Payout Policy by : Harry DeAngelo

Download or read book Corporate Payout Policy written by Harry DeAngelo and published by Now Publishers Inc. This book was released on 2009 with total page 215 pages. Available in PDF, EPUB and Kindle. Book excerpt: Corporate Payout Policy synthesizes the academic research on payout policy and explains "how much, when, and how". That is (i) the overall value of payouts over the life of the enterprise, (ii) the time profile of a firm's payouts across periods, and (iii) the form of those payouts. The authors conclude that today's theory does a good job of explaining the general features of corporate payout policies, but some important gaps remain. So while our emphasis is to clarify "what we know" about payout policy, the authors also identify a number of interesting unresolved questions for future research. Corporate Payout Policy discusses potential influences on corporate payout policy including managerial use of payouts to signal future earnings to outside investors, individuals' behavioral biases that lead to sentiment-based demands for distributions, the desire of large block stockholders to maintain corporate control, and personal tax incentives to defer payouts. The authors highlight four important "carry-away" points: the literature's focus on whether repurchases will (or should) drive out dividends is misplaced because it implicitly assumes that a single payout vehicle is optimal; extant empirical evidence is strongly incompatible with the notion that the primary purpose of dividends is to signal managers' views of future earnings to outside investors; over-confidence on the part of managers is potentially a first-order determinant of payout policy because it induces them to over-retain resources to invest in dubious projects and so behavioral biases may, in fact, turn out to be more important than agency costs in explaining why investors pressure firms to accelerate payouts; the influence of controlling stockholders on payout policy --- particularly in non-U.S. firms, where controlling stockholders are common --- is a promising area for future research. Corporate Payout Policy is required reading for both researchers and practitioners interested in understanding this central topic in corporate finance and governance.

Executive Compensation and Earnings Management Under Moral Hazard

Author : Bo Sun
Publisher : DIANE Publishing
ISBN 13 : 1437930980
Total Pages : 33 pages
Book Rating : 4.4/5 (379 download)

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Book Synopsis Executive Compensation and Earnings Management Under Moral Hazard by : Bo Sun

Download or read book Executive Compensation and Earnings Management Under Moral Hazard written by Bo Sun and published by DIANE Publishing. This book was released on 2010-08 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: Analyzes executive compensation in a setting where managers may take a costly action to manipulate corporate performance, and whether managers do so is stochastic. Examines how the opportunity to manipulate affects the optimal pay contract, and establishes necessary and sufficient conditions under which earnings management occurs. The author¿s model provides a set of implications on the role earnings management plays in driving the time-series and cross-sectional variation of executive compensation. In addition, the model's predictions regarding the changes of earnings management and executive pay in response to corporate governance legislation are consistent with empirical observations. Charts and tables.

Earnings Management and Corporate Finance

Author : Joanna Lizińska
Publisher : Taylor & Francis
ISBN 13 : 1040104150
Total Pages : 235 pages
Book Rating : 4.0/5 (41 download)

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Book Synopsis Earnings Management and Corporate Finance by : Joanna Lizińska

Download or read book Earnings Management and Corporate Finance written by Joanna Lizińska and published by Taylor & Francis. This book was released on 2024-07-01 with total page 235 pages. Available in PDF, EPUB and Kindle. Book excerpt: In today's dynamic landscape of accounting, corporate finance, and business management, earnings management has assumed paramount importance. Transparent and reliable accounting information is crucial for accurate corporate performance forecasting and financial decision-making. This book uniquely discusses practical earnings management methods within the accounting and taxation realms. It is supported by extensive international evidence linking informativeness of financial reports to companies’ financial decisions. Delving into the earnings management process, this book provides profound insights into how profits can be influenced through accounting choices and real business transactions. Real-life case studies will undoubtedly facilitate the understanding of accounting and taxation methods. Additionally, it unravels key elements of corporate finance puzzles related to the transparency of financial reports, including the macroeconomic environment, profit thresholds, cash management, audit quality, financing decisions, and financial health. With broad empirical evidence from various European countries, it multidimensionally explores the important link between the quality of information in financial statements and trade-offs behind financial decisions. The book serves as a valuable reference for international researchers in corporate finance, accounting, and corporate governance. It is also a powerful tool for business practitioners, including owners, lenders, auditors, regulatory and professional bodies, business partners, or other market participants. For those seeking the latest insights on earnings management, those producing or assessing accounting information, and those using financial reports in their research or business practice, this book is a must-read.

Earnings Management and Corporate Governance. An Investigation of Financial Statement Reporting of Publicly Listed Companies in Nigeria

Download Earnings Management and Corporate Governance. An Investigation of Financial Statement Reporting of Publicly Listed Companies in Nigeria PDF Online Free

Author : Ademola Akinteye
Publisher : GRIN Verlag
ISBN 13 : 334607871X
Total Pages : 862 pages
Book Rating : 4.3/5 (46 download)

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Book Synopsis Earnings Management and Corporate Governance. An Investigation of Financial Statement Reporting of Publicly Listed Companies in Nigeria by : Ademola Akinteye

Download or read book Earnings Management and Corporate Governance. An Investigation of Financial Statement Reporting of Publicly Listed Companies in Nigeria written by Ademola Akinteye and published by GRIN Verlag. This book was released on 2019-12-09 with total page 862 pages. Available in PDF, EPUB and Kindle. Book excerpt: Doctoral Thesis / Dissertation from the year 2015 in the subject Business economics - Investment and Finance, grade: Great Distinction, UGSM-Monarch Business School Switzerland (Accounting and Finance), course: Doctor of Philosophy in Finance, language: English, abstract: The dissertation examined Earnings Management and Corporate Governance Governance Practices of the firms that are listed on the floor of the Nigerian Stock Exchange. The researcher investigated the published financial statements of all the listed companies across all the sectors of the exchange using empirical quantitative research methods. Al the variables of earnings management were extracted from the published annual financial statements and Directors Annual Reports through Content Analysis. The paper further explored all the variables of corporate governance as published by the Directors in the Annual Reports in the Financial Statements and through a face to face recorded interviews of the members of the Board of Directors, the members of the Audit Committees and the Heads of Internal Audit Functions in the Listed Public Companies. The study documented that companies that are listed on the Nigerian Stock Exchange are involved in both the upward and downward earnings management practices. This findings cut across all the Sectors and categorization of the companies on the Nigerian Stock Exchange. The research thus recommended the need for better oversight by the Board of Directors, the Audit Committee and the Market Regulators mainly the Security and Exchange Commission and the Nigerian Stock Exchange. The findings of the Research on Corporate Governance is mixed. In certain sectors, evidence of strong corporate governance are documented as reflected in the quality of Board Members, the Quality of the deliberations at the Board meetings, the independence of the Board, the independence of the Audit Committee and the independence and effectiveness of the Head of the Internal Audit function measured by the reporting line of the holder of this role. In some sectors, the ingredients of strong corporate governance were missing thus suggesting a need for a more stricter regime of corporate governance to be implemented in these corporations.

Corporate Governance and Earnings Management

Author : Sonda Marrakchi Chtourou
Publisher :
ISBN 13 :
Total Pages : 35 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Corporate Governance and Earnings Management by : Sonda Marrakchi Chtourou

Download or read book Corporate Governance and Earnings Management written by Sonda Marrakchi Chtourou and published by . This book was released on 2003 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates whether a firm's corporate governance practices have an effect on the quality of its publicly released financial information. In particular, we examine the relationship between audit committee and board of directors characteristics and the extent of corporate earnings management as measured by the level of positive and negative discretionary accruals. Using two groups of US firms, one with relatively high and one with relatively low levels of discretionary accruals in the year 1996, we find that earnings management is significantly associated with some of the governance practices by audit committees and boards of directors. For audit committees, income increasing earnings management is negatively associated with a larger proportion of outside members who are not managers in other firms, a clear mandate for overseeing both the financial statements and the external audit, and a committee composed only of independent directors that meets more than twice a year. We also find that short-term stocks options held by non-executive committee members are associated with income increasing earnings management. Income decreasing earnings management is negatively associated with the presence of at least a member with financial expertise and a clear mandate for overseeing both the financial statements and the external audit.For the board of directors, we find less income increasing earnings management in firms whose outside board members have experience as board members with the firm and with other firms. We also find that larger board, the importance of the ownership stakes in the firm held by non-executive directors, and experience as board members seems to reduce income decreasing earnings management.Our results provide evidence that effective boards and audit committees constrain earnings management activities. These findings have implications for regulators, such as the Securities and Exchange Commission (SEC), as they attempt to supervise firms whose financial reporting is in the gray area between legitimacy and outright fraud and where earnings statements reflect the desires of management rather than the underlying financial performance of the company, as pointed out by the Blue Ribbon Committee (1999).

Earnings Management, Corporate Governance, and True Financial Performance

Author : Hassan Tehranian
Publisher :
ISBN 13 :
Total Pages : 30 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Earnings Management, Corporate Governance, and True Financial Performance by : Hassan Tehranian

Download or read book Earnings Management, Corporate Governance, and True Financial Performance written by Hassan Tehranian and published by . This book was released on 2010 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper addresses two questions. First, do corporate governance mechanisms that have been shown to affect firm behavior in other contexts also affect the degree to which firms advantageously manage their reported financial performance? Second, does past research investigating the impact of governance structure and option-based compensation on firm performance stand up when measured performance is adjusted for the impact of earnings management? We demonstrate that corporate governance mechanisms effectively constrain discretion in earnings management and that the estimated impact of governance variables on corporate performance is far stronger when discretionary accruals are removed from reported earnings. Institutional ownership of shares, institutional investor representation on the board of directors, and the presence of independent outside directors on the board all reduce the use of discretionary accruals in earnings management. These factors largely offset the impact of options compensation, which we find strongly encourages earnings management. Earnings management strongly affects patterns of reported corporate performance. While conventional profitability measures suggest a strong relationship between option compensation and firm performance, profitability measures that are adjusted for the impact of discretionary accruals show no relationship with option compensation. In contrast, the estimated impact of corporate governance variables on firm performance more than doubles when discretionary accruals are eliminated from measured profitability.

Earnings Management

Author : Joshua Ronen
Publisher : Springer Science & Business Media
ISBN 13 : 0387257713
Total Pages : 587 pages
Book Rating : 4.3/5 (872 download)

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Book Synopsis Earnings Management by : Joshua Ronen

Download or read book Earnings Management written by Joshua Ronen and published by Springer Science & Business Media. This book was released on 2008-08-06 with total page 587 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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?

Earnings Management. The Influence of Real and Accrual-Based Earnings Management on Earnings Quality

Author :
Publisher : GRIN Verlag
ISBN 13 : 3964875953
Total Pages : 81 pages
Book Rating : 4.9/5 (648 download)

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Book Synopsis Earnings Management. The Influence of Real and Accrual-Based Earnings Management on Earnings Quality by :

Download or read book Earnings Management. The Influence of Real and Accrual-Based Earnings Management on Earnings Quality written by and published by GRIN Verlag. This book was released on 2024-01-31 with total page 81 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2019 in the subject Business economics - Accounting and Taxes, University of Duisburg-Essen, course: Master Thesis, language: English, abstract: This paper delves into various theories and approaches, aiming to define and differentiate earnings management from related concepts such as fraud, expectation management, and impression management. It explores the goals and incentives driving earnings management, including maximizing or minimizing earnings, beating targets, and smoothing. At the onset of the new millennium, corporate scandals rocked the business world, eroding trust in management, boards of directors, and the accounting profession. In response, regulations and policies aimed at enhancing corporate governance and financial reporting were swiftly implemented. The credibility, clarity, and consistency of financial reporting practices play a pivotal role in enabling investors to make informed decisions. Accurate and fair financial performance representations, as opposed to inflated and misleading figures, are essential for market players, including shareholders and creditors. Investors rely on audited financial reports to guide their investment decisions, underscoring the critical importance of accuracy and reliability in publicly available financial disclosures. Auditors, by reducing the risk of material misstatement, ensure the integrity of the information disclosed in a company's financial statements. Management, with the goal of achieving promised targets and ensuring the company's existence, may engage in earnings management as a strategic contribution to corporate policy. Financial reporting serves as a means to distinguish well-performing companies from their counterparts, facilitating efficient resource allocation and empowering stakeholders to make effective decisions. The disclosed earnings results significantly impact a firm's overall business activities and management decisions, particularly in satisfying analysts' expectations, which can influence equity value. While accounting standards play a role, the quality of financial statements is more influenced by company-specific and institutional factors shaping managers' incentives. These factors lead to financial reporting practices being viewed as the outcome of a cost-benefit assessment.

International Financial Reporting Standards and New Directions in Earnings Management

Author : Oliveira, Jonas da Silva
Publisher : IGI Global
ISBN 13 : 1522578188
Total Pages : 342 pages
Book Rating : 4.5/5 (225 download)

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Book Synopsis International Financial Reporting Standards and New Directions in Earnings Management by : Oliveira, Jonas da Silva

Download or read book International Financial Reporting Standards and New Directions in Earnings Management written by Oliveira, Jonas da Silva and published by IGI Global. This book was released on 2019-03-22 with total page 342 pages. Available in PDF, EPUB and Kindle. Book excerpt: The fiscal market is an unpredictable torrent of information that modern organizations strive to understand. Business professionals dedicate themselves to understanding uncertain results around economic performance to improve management, reporting standards, and predict trends in financial statements. International Financial Reporting Standards and New Directions in Earnings Management is an essential reference source that discusses identifying the behavioral patterns of managers and the accounting policies they use in different opportunistic circumstances. Featuring research on topics such as earnings quality, risk reports, and investor protection, this book is ideal for regulatory authorities, accountants, impression managers, auditors, academics, students, and researchers seeking coverage on the theoretical, empirical, and experimental studies that relate to the different themes within earnings management.

Earnings Management and Corporate Governance. An Investigation OfFinancial Statement Reporting of Publicly Listed Companies in Nigeria

Author : Ademola Akinteye
Publisher :
ISBN 13 : 9783346078728
Total Pages : 868 pages
Book Rating : 4.0/5 (787 download)

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Book Synopsis Earnings Management and Corporate Governance. An Investigation OfFinancial Statement Reporting of Publicly Listed Companies in Nigeria by : Ademola Akinteye

Download or read book Earnings Management and Corporate Governance. An Investigation OfFinancial Statement Reporting of Publicly Listed Companies in Nigeria written by Ademola Akinteye and published by . This book was released on 2019-10-22 with total page 868 pages. Available in PDF, EPUB and Kindle. Book excerpt: Doctoral Thesis / Dissertation from the year 2015 in the subject Business economics - Investment and Finance, grade: Great Distinction, UGSM-Monarch Business School Switzerland (Accounting and Finance), course: Doctor of Philosophy in Finance, language: English, abstract: The dissertation examined Earnings Management and Corporate Governance Governance Practices of the firms that are listed on the floor of the Nigerian Stock Exchange. The researcher investigated the published financial statements of all the listed companies across all the sectors of the exchange using empirical quantitative research methods. Al the variables of earnings management were extracted from the published annual financial statements and Directors Annual Reports through Content Analysis. The paper further explored all the variables of corporate governance as published by the Directors in the Annual Reports in the Financial Statements and through a face to face recorded interviews of the members of the Board of Directors, the members of the Audit Committees and the Heads of Internal Audit Functions in the Listed Public Companies. The study documented that companies that are listed on the Nigerian Stock Exchange are involved in both the upward and downward earnings management practices. This findings cut across all the Sectors and categorization of the companies on the Nigerian Stock Exchange. The research thus recommended the need for better oversight by the Board of Directors, the Audit Committee and the Market Regulators mainly the Security and Exchange Commission and the Nigerian Stock Exchange. The findings of the Research on Corporate Governance is mixed. In certain sectors, evidence of strong corporate governance are documented as reflected in the quality of Board Members, the Quality of the deliberations at the Board meetings, the independence of the Board, the independence of the Audit Committee and the independence and effectiveness of the Head of the Internal Audit function measur

Corporate Governance and Earnings Management

Author : Ruth W. Epps
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Corporate Governance and Earnings Management by : Ruth W. Epps

Download or read book Corporate Governance and Earnings Management written by Ruth W. Epps and published by . This book was released on 2007 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the relationship between corporate governance characteristics and earnings management. These characteristics include board structure, board composition, board size, CEO characteristics, nominating committee independence, compensation committee independence, and board disclosure policies. The study makes no pre-assumptions or specific predictions on which corporate governance characteristics have an impact on earnings management and which would not. Rather, a factor analysis approach is used, whereby all the above fore mentioned aspects of corporate governance are linked to earnings management to determine the corporate governance factor loading. Three groups of U.S. firms, one with relatively high negative, one with relatively high positive and one with low levels of discretionary accruals in the year 2004 are examined. In contrast to prior literature where board composition is defined as either an insiders-controlled board or outsiders-controlled board, this study classifies board composition into seven discrete categories: >50% insiders, >50% insiders and affiliated officers, between 50% and 66.7% outsiders, between 75% and 90% outsiders, between 90% and 100% outsiders, and 100% outsiders. In a univariate approach, the study finds that firms with annually elected boards, small size boards, 100% independent nominating committees and 100% independent compensation committees have more negative discretionary accruals. However, firms with 75% to 90% independent board or firms with a board size of between 9 and 12 have higher positive discretionary accruals. The study's major contributions to the existing literature are its findings that income-increasing and income-decreasing discretionary accruals have a different relationship with corporate governance practices and its expansion of the scope of corporate governance from board independence and audit committee independence to other corporate governance characteristics such as board election rule, board size, nominating committee independence, compensation committee independence, and board disclosure policies.

Earnings Quality

Author : Jennifer Francis
Publisher : Now Publishers Inc
ISBN 13 : 1601981147
Total Pages : 97 pages
Book Rating : 4.6/5 (19 download)

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Book Synopsis Earnings Quality by : Jennifer Francis

Download or read book Earnings Quality written by Jennifer Francis and published by Now Publishers Inc. This book was released on 2008 with total page 97 pages. Available in PDF, EPUB and Kindle. Book excerpt: This review lays out a research perspective on earnings quality. We provide an overview of alternative definitions and measures of earnings quality and a discussion of research design choices encountered in earnings quality research. Throughout, we focus on a capital markets setting, as opposed, for example, to a contracting or stewardship setting. Our reason for this choice stems from the view that the capital market uses of accounting information are fundamental, in the sense of providing a basis for other uses, such as stewardship. Because resource allocations are ex ante decisions while contracting/stewardship assessments are ex post evaluations of outcomes, evidence on whether, how and to what degree earnings quality influences capital market resource allocation decisions is fundamental to understanding why and how accounting matters to investors and others, including those charged with stewardship responsibilities. Demonstrating a link between earnings quality and, for example, the costs of equity and debt capital implies a basic economic role in capital allocation decisions for accounting information; this role has only recently been documented in the accounting literature. We focus on how the precision of financial information in capturing one or more underlying valuation-relevant constructs affects the assessment and use of that information by capital market participants. We emphasize that the choice of constructs to be measured is typically contextual. Our main focus is on the precision of earnings, which we view as a summary indicator of the overall quality of financial reporting. Our intent in discussing research that evaluates the capital market effects of earnings quality is both to stimulate further research in this area and to encourage research on related topics, including, for example, the role of earnings quality in contracting and stewardship.

Board of Directors' Governance Challenges and Earnings Management

Author : Ruth W. Epps
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Board of Directors' Governance Challenges and Earnings Management by : Ruth W. Epps

Download or read book Board of Directors' Governance Challenges and Earnings Management written by Ruth W. Epps and published by . This book was released on 2008 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Purpose - This study examines the relationship between corporate governance and earnings management in U.S. context and provides further insights on the effects of board of directors' characteristics on earnings management. The study uses a sample of three groups of U.S. firms; where firms with relatively high negative, firms with relatively high positive and those with low levels of discretionary accruals in the year 2004 are examined. Descriptive statistics, univariate analysis, multivariate analysis, board of directors' characteristics and possible relationships between corporate governance variables and earnings management proxy provide the basis for discussion. The findings indicate that firms with annually elected boards, small size boards, 100% independent nominating committees and 100% independent compensation committees have more negative discretionary accruals. However, firms with 75% to 90% independent board or firms with a board size of between 9 and 12 have higher positive discretionary accruals.Research Implications - Certain board characteristics may be important factors associated with constraining the propensity of managers to engage in earnings management.The study's major contributions to the existing literature are its findings that income-increasing and income-decreasing discretionary accruals have a different relationship with corporate governance practices and its expansion of the scope of corporate governance from board independence and audit committee independence to other corporate governance characteristics. This study provides evidence that supports U.S. regulators' initiatives that stronger corporate governance mechanisms provide greater monitoring of the financial accounting process and may be important factors in improving the integrity of financial reporting.

Earnings Management and Corporate Governance

Author : Biao Xie
Publisher :
ISBN 13 :
Total Pages : 32 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Earnings Management and Corporate Governance by : Biao Xie

Download or read book Earnings Management and Corporate Governance written by Biao Xie and published by . This book was released on 2002 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the role of the board of directors, the audit committee, and the executive committee in preventing earnings management. Supporting an SEC Panel Report's conclusion that audit committee members need financial sophistication, we show that the composition of a board in general and of an audit committee more specifically, is related to the likelihood that a firm will engage in earnings management. Board and audit committee members with corporate or financial backgrounds are associated with firms that have smaller discretionary current accruals. Board and audit committee meeting frequency is also associated with reduced levels of discretionary current accruals. We conclude that board and audit committee activity and their members' financial sophistication may be important factors in constraining the propensity of managers to engage in earnings management.