What objectives do managers pursue when they manage their firms` earnings and how do
investors react to earnings management? To address these questions, we examine the
earnings management of firms by using a sample of all U.S. public firms with data
from 1980 to 1997.
Managers can either increase current earnings to signal positive future performance
(signaling), or hide negative past performance (manipulation). Using discretionary
current accruals as a proxy for voluntary earnings management, we find that about
20% (and other 20%) of our sample firms manipulate their earnings upward (downward)
during the sample period. Our empirical results also suggest that firms with high
level of earnings management perform poorly over a subsequent 12-month period.
Additionally, discretionary current accruals exhibit negative autocorrelation.
학회소식
공지사항
[2003년 제 2차] Earnings Management and Return Reversal
작성자 : 관리자
조회수 : 981
게시일 :
2003-07-12