New Perspective of Earnings Management: The Effect of Outsiders' Requirements on Managerial Choice of Earnings Management Mechanisms

This study argues that the managerial choice of earnings management strategy could be contingent upon a firm’s information asymmetry and such a strategy may affect the firm’s earnings predictability. Measuring information asymmetry by earnings predictability based on the subsequent industry-adjusted dispersion in analysts’ forecasts and employing a quantile regression to analyze 28,383 US firm-year observations from 1988 to 2014, this study reports that the effect of earnings management strategies on earnings predictability is nonuniform. Specifically, the amount of absolute discretionary accruals is negatively (positively) related to the subsequent industry-adjusted dispersion in the low (high) quantiles of analysts’ forecasts. These results support the hypothesis that a firm could implement earnings management strategies according to the degree of information asymmetry between the firm’s management and corporate outsiders. JEL Classification: G12, G32

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Minority shareholder participation and earnings management

China Finance Review International ◽

10.1108/cfri-01-2018-0007 ◽

2019 ◽

Vol 9 (1) ◽

pp. 73-109 ◽

Cited By ~ 3

Author(s):

Dongming Kong

Keyword(s):

Corporate Governance ◽

Earnings Management ◽

Minority Shareholders ◽

Excessive Pressure ◽

Data Set ◽

Content Type ◽

External Monitoring ◽

Corporate Decisions ◽

Alternative Measures ◽

New Perspective

PurposeThe purpose of this paper is to test a catering theory by examining impacts of minority shareholders’ pressures on earnings management (EM), and attempt to answer: what is the role of minority shareholders participation (MSP) in corporate governance? and does MSP serve as an external monitor to managers, or does it put excessive pressure on them?Design/methodology/approachUsing a novel online voting data set in China’s stock market, the author constructs the measure of MSP, and regress the EM on MSP. To address the endogeneity, the author introduces propensity score matching and difference-in-difference methods, instrumental variables, and Heckman estimation to show that the results are robust to different specifications and alternative measures.FindingsThe author documents that: MSP plays limited role in external monitoring; and firms facing high MSP levels tend to manage earnings more actively. In addition, information asymmetry, proposals’ importance, managerial incentives, and CEO financial expertise significantly affect firms’ catering behaviors.Originality/valueThis paper contributes to different strands of the literature. First, the finding significantly supports the catering hypothesis from a new perspective of EM. Second, the author contributes to a hotly debated issue in corporate governance: whether minority shareholders should be granted increased participation in corporate decisions? The results also provide timely empirical evidence for government regulators who are concerned about the costs and benefits of granting minority shareholders direct control over corporate decisions.

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CEO Succession, Investor Expectations, and Real Earnings Management

Asian Journal of Finance & Accounting ◽

10.5296/ajfa.v7i2.8318 ◽

2015 ◽

Vol 7 (2) ◽

pp. 120

Author(s):

Chaur-Shiuh Young ◽

Yueh-Ju Lin ◽

Fei-Liang Chien ◽

Chia-Hui Chen

Keyword(s):

Earnings Management ◽

Market Reaction ◽

Market Volatility ◽

Real Earnings Management ◽

Ceo Succession ◽

Stock Market Volatility ◽

Market Reactions ◽

Future Performance ◽

New Perspective ◽

Ceo Successions

<p>Recently, U.S. firms are switching CEO at the fastest pace and these events often cause severe stock market volatility on the uncertainty of the firm’s future performance. This study investigates whether inverse market reaction on CEO succession will induce earnings management of new CEOs in order to protect their reputational and career prospects. From a sample of 2,418 firm-years during the post-SOX period of 2003 to 2012 by applying the regression analysis, we investigate two associations of real earnings management (REM) with CEO successions and with its market reaction respectively. Our results suggest new CEOs are more careful when manipulate earnings through REM activities. However, REM is negatively associated with market expectations on CEO successions, implying new CEOs may utilize REM to reverse the first bad impressions held by investors. We provide a new perspective with regard to market reactions to CEO successions, by examining how and why new CEOs may choose to manipulate earnings.</p>

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SREM observation of the interaction between the in-situ deposited Pd small particles and MgO cleavage surface

Proceedings, annual meeting, Electron Microscopy Society of America ◽

10.1017/s0424820100143523 ◽

1986 ◽

Vol 44 ◽

pp. 382-383

Author(s):

H.-J. Ou

Keyword(s):

Electron Microscopy ◽

Small Particle ◽

Small Particles ◽

Cleavage Surface ◽

Metallic Particles ◽

Microscopy Technique ◽

Ceramic Surfaces ◽

Reflection Electron Microscopy ◽

New Perspective

The understanding of the interactions between the small metallic particles and ceramic surfaces has been studied by many catalyst scientists. We had developed Scanning Reflection Electron Microscopy technique to study surface structure of MgO hulk cleaved surface and the interaction with the small particle of metals. Resolutions of 10Å has shown the periodic array of surface atomic steps on MgO. The SREM observation of the interaction between the metallic particles and the surface may provide a new perspective on such processes.

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Articulation Training: A New Perspective

Language Speech and Hearing Services in Schools ◽

10.1044/0161-1461.1003.145 ◽

1979 ◽

Vol 10 (3) ◽

pp. 145-151 ◽

Cited By ~ 1

Author(s):

Sallie W. Hillard ◽

Laura P. Goepfert

Keyword(s):

Life Experience ◽

Remediation Measures ◽

New Perspective

This paper describes the concept of teaching articulation through words which have inherent meaning to a child’s life experience, such as a semantically potent word approach. The approach was used with six children. Comparison of pre/post remediation measures indicated that it has promise as a technique for facilitating increased correct phoneme production.

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