scholarly journals Debt Financing Plan and Earnings Management

2013 ◽  
Vol null (49) ◽  
pp. 291-310
Author(s):  
이장건 ◽  
허봉구
Keyword(s):  
Earnings Management ◽  
Debt Financing

scholarly journals The Effect Of Short-Term Debt On Accrual Based Earnings Management And Real Earnings Management

2016 ◽  
Vol 32 (4) ◽  
pp. 1287-1300
Author(s):  
Sun-young Park
Keyword(s):  
Earnings Management ◽  
Financial Institutions ◽  
Liquidity Risk ◽  
Discretionary Accruals ◽  
Debt Financing ◽  
Real Earnings Management ◽  
Financing Constraints ◽  
Total Current ◽  
Short Term ◽  
Management Method

This study investigates whether short-term debt is related to earnings management. Short-term debt is divided into total current liabilities, debt in current liabilities and short-term borrowings. In addition, this study examines how short-term debt is related to how firms manage their earnings. I use discretionary accruals and real operating decisions as the earnings management method. The study finds that debt in current liabilities only has a statistically significant impact on accrual earnings management, and short-term borrowings are only shown to have a statistically significant impact on real earnings management. These results indicate that managers engage in accrual earnings management of debt included in current liabilities and use real earnings management of short-term borrowings from financial institutions.Therefore, this evidence indicates that managers engage in accrual earnings management of debt in included current liabilities when they face the liquidity risk of short-term debt, and the firms with debt financing constraints are likely to manage real earnings in spite of enhanced firm monitoring by lenders such as financial institutions. The findings in this study may have implications in the debate about the monitoring function of financial institutions such as banks.

scholarly journals Do Ownership Ties Increase the Optimistic Bias of Analysts’ Earnings Estimates? Evidence from Corporate Financing in the Korean Market

2020 ◽  
Vol 12 (11) ◽  
pp. 4657
Author(s):  
Chune Young Chung ◽  
Euisup Lee ◽  
Chang-Gyun Park
Keyword(s):  
Earnings Management ◽  
Debt Financing ◽  
Optimistic Bias ◽  
Business Relationship ◽  
Equity Financing ◽  
Corporate Financing ◽  
Need Support ◽  
Korean Market

Previous studies argue that analysts provide optimistic estimates for corporations with which their brokerage houses have a business relationship. In this study, we investigate whether brokers with ownership ties issue optimistic estimates when their affiliates need support, as when raising debt or issuing equity. We find that Chaebol-owned brokerage houses provide optimistic earnings estimates for their affiliates relative to those provided by other brokers, especially before debt financing. However, we do not observe this relationship in the case of equity financing. These results imply that analysts with ties to corporations expect earnings management to occur around seasoned equity financing and, thus, consider the risks to their reputations. Finally, our results show that brokerage houses with ownership ties are not significantly more accurate than other brokerage houses are.

Does the Use of Financial Derivatives Affect Earnings Management Decisions?

2001 ◽  
Vol 76 (1) ◽  
pp. 1-26 ◽  
Author(s):  
Jan Barton
Keyword(s):  
Earnings Management ◽  
Discretionary Accruals ◽  
Fortune 500 ◽  
Income Taxes ◽  
Debt Financing ◽  
Simultaneous Equations ◽  
Managerial Compensation ◽  
Earnings Volatility ◽  
Earnings Surprises ◽  
Financing Costs

I present evidence consistent with managers using derivatives and discretionary accruals as partial substitutes for smoothing earnings. Using 1994–1996 data for a sample of Fortune 500 firms, I estimate a set of simultaneous equations that captures managers' incentives to maintain a desired level of earnings volatility through hedging and accrual management. These incentives include increasing managerial compensation and wealth, reducing corporate income taxes and debt financing costs, avoiding underinvestment and earnings surprises, and mitigating volatility caused by low diversification. After controlling for such incentives, I find a significant negative association between derivatives' notional amounts and proxies for the magnitude of discretionary accruals.

Pengaruh Hubungan Politik Terhadap Manajemen Laba Pada Perusahaan Sektor Jasa Dengan Variabel Kontrol Ukuran Perusahaan Dan Kualitas Audit

2018 ◽  
Vol 16 (2) ◽  
pp. 30
Author(s):  
Dwikky Darmawan ◽  
Weny Putri
Keyword(s):  
Earnings Management ◽  
Firm Size ◽  
Significant Influence ◽  
Service Sector ◽  
Audit Quality ◽  
Stock Exchange ◽  
Secondary Data ◽  
Annual Reports ◽  
Political Connection ◽  
Discretionary Accrual

The purpose of this study is to determine the effects of political connection toward the earnings management of service sector companies with control variables firm size and audit quality. Firm�s political connection measured by using dummy variable. Earnings management is proxied by discretionary accrual which is measured by using Modified Jones Model. The research data applied in this study are the secondary data which are taken from the annual reports of service sector companies that listed in Indonesian Stock Exchange of 2016-2017 periods. There are 330 observations fit as sample, which are taken by using purposive sampling method. Data are processed by applying the multiple linear regression test. The result show that the political connection had positive but not significant influence to earnings management. Firm size had negative but not significant influence to earnings management. Whereas the audit quality had a negative and significant influence to earnings management.

Our Debts Heavy... (on the Monograph “Debt as a Phenomenon of the XXI Century”)

2015 ◽  
pp. 152-159 ◽  
Author(s):  
T. Leonova
Keyword(s):  
European Union ◽  
Economic Development ◽  
Global Economy ◽  
Debt Financing ◽  
The European Union ◽  
National Economies

Lending capital, credit and debt financing have been around and used to fuel economic development since the time immemorial. There are innumerable studies by international and Russian scholars that look into the evolution of these notions and lending instruments employed. The collective monograph edited by A. Porokhovsky and published by the MSU in 2014 intends to provide an all-around political and economic as well as applied review of the current debt issues faced by the global economy, national economies of Russia, U.S.A. and countries of the European Union. It uses a variety of academic and methodological postulates that range from the reproduction approach to modern macroeconomic doctrines.

The relation between R&D accounting treatment and the risk of the firm: Evidence from the Italian market

2014 ◽  
pp. 33-54 ◽  
Author(s):  
Riccardo Cimini ◽  
Alessandro Gaetano ◽  
Alessandra Pagani
Keyword(s):  
Earnings Management ◽  
Fiscal Year ◽  
Investment Strategies ◽  
Capital Assets ◽  
Italian Market ◽  
D Investment ◽  
Firm Evidence

In this paper, we investigate the relation between the different accounting treatments of R&D expenditures and the risk of the entity in order to identify under which treatment insiders are more likely to carry out earnings management. By analysing the R&D investment strategies of a sample of 137 listed Italian entities that complied with the requirements of IAS 38 during fiscal year 2009, following Lantz and Sahut (2005), we calculate several indexes that show the preferences of insiders to account R&D expenditures as costs or capital assets, and we study the relation of such preferences with the risk of the entity, which we measure with the unlevered beta. We hypothesize that the entities, which considered the R&D investments as costs, are the riskiest ones due to the higher probability that insiders carried out earnings management. Our results confirm such hypothesis. This paper could have implications for academics and standard setters that could learn that behind accounting discretion, insiders could opportunistically behave against outsiders.

Sign in / Sign up

Export Citation Format

Share Document