Earnings Management Conservatism And Earnings Quality

Author : Ralf Ewert,Alfred Wagenhofer
Publisher : Unknown
Page : 142 pages
File Size : 44,6 Mb
Release : 2012
Category : Business & Economics
ISBN : UCSD:31822038808689

Get Book

Earnings Management, Conservatism, and Earnings Quality by Ralf Ewert,Alfred Wagenhofer Pdf

Earnings Management, Conservatism, and Earnings Quality reviews and illustrates earnings management, conservatism, and their effects on earnings quality in an economic modeling framework. Both earnings management and conservative accounting introduce biases to financial reports. The fundamental issue addressed is what economic effects these biases have on earnings quality or financial reporting quality. Earnings Management, Conservatism, and Earnings Quality reviews analytical models of earnings management and conservatism and shows that both can have beneficial or detrimental economic effects, so a differentiated view is appropriate. Earnings management can provide additional information via the financial reporting communication channel, but it can also be used to misrepresent the firm's position. What the authors find is that similar to earnings management, conservatism can reduce the information content of financial reports if it suppresses relevant information, but it can be a desirable feature that improves economic efficiency. The approach to study earnings management, conservatism, and earnings quality is based on the information economics literature. A variety of analytical models are reviewed that capture the effects and subtle interactions of managers' incentives and rational expectations of users. The benefit of analytical models is to make precise these, often highly complex, strategic effects. They offer a rigorous explanation for the phenomena and show that sometimes conventional wisdom does not apply. The monograph is organized around a few basic model settings, which are presented in simple versions first and then in extensions to elicit the main insights most clearly. Chapter 2 presents the basic rational expectations equilibrium model with earnings management and rational inferences by the capital market. Chapter 3 is devoted to earnings quality and earnings quality metrics used in many studies. Chapter 4 studies conservatism in accounting. Finally, the authors examine the interaction between conservatism and earnings management. Each chapter ends with a section containing a summary of the main findings and conclusions.

Author : Sanjay Wikash Bissessur
Publisher : Rozenberg Publishers
Page : 217 pages
File Size : 43,8 Mb
Release : 2005
Category : Electronic
ISBN : 9789051709872

Get Book

Earnings quality and earnings management by Sanjay Wikash Bissessur Pdf

Author : Jennifer Francis,Per Olsson,Katherine Schipper
Publisher : Now Publishers Inc
Page : 97 pages
File Size : 43,5 Mb
Release : 2008
Category : Business & Economics
ISBN : 9781601981141

Get Book

Earnings Quality by Jennifer Francis,Per Olsson,Katherine Schipper Pdf

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.

Author : Elisa Menicucci
Publisher : Springer Nature
Page : 154 pages
File Size : 48,9 Mb
Release : 2019-12-21
Category : Business & Economics
ISBN : 9783030367985

Get Book

Earnings Quality by Elisa Menicucci Pdf

This book provides an overview of earnings quality (EQ) in the context of financial reporting and offers suggestions for defining and measuring it. Although EQ has received increasing attention from investors, creditors, regulators, and researchers in different areas, there are various definitions of it and different approaches for its measurement. The book describes the relationship between EQ and earnings management (EM) since they can be considered related challenges, especially in the context of international financial reporting standards (IAS/IFRSs). EM occurs when managers make discretionary accounting choices that are regarded as either an efficient communication of private information to improve the informativeness of a firm’s current and future performance, or a distorting disclosure to mislead the firm’s true performance. The intentional manipulation of earnings by managers, within the limits allowed by the accounting standards, may alter the usefulness of financial reporting and lead to lower quality of earnings. The use of fair value in financial reporting has created a current debate about the impact it might have on EQ. At times, the high subjectivity in estimating fair value can allow opportunities for the exercise of management judgments and intentional bias, which can reduce the quality of financial reporting. Management discretion can result in high EM and hence in a reduction of EQ. Particularly during difficult financial periods, managers engage in EM to mask the negative effects of the turmoil, and in such circumstances accruals and earnings smoothing are attempts to reduce abnormal variations of earnings in such circumstances. This book is a valuable resource for those interested in wider perspectives on EQ and it adds to the research studies on this topic in the context of financial reporting.

Author : Anonim
Publisher : Unknown
Page : 128 pages
File Size : 50,8 Mb
Release : 2016-09-01
Category : Electronic
ISBN : 1634855493

Get Book

Earnings Management by Anonim Pdf

Author : Malek El Diri
Publisher : Springer
Page : 0 pages
File Size : 42,8 Mb
Release : 2018-08-18
Category : Business & Economics
ISBN : 3319873717

Get Book

Introduction to Earnings Management by Malek El Diri Pdf

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.

Author : Igor Goncharov
Publisher : Europäische Hochschulschriften / European University Studies / Publications Universitaires Européennes
Page : 184 pages
File Size : 40,8 Mb
Release : 2005
Category : Business & Economics
ISBN : IND:30000109312375

Get Book

Earnings Management and Its Determinants by Igor Goncharov Pdf

Originally presented as the author's thesis (doctoral)--University of Bremen.

Author : Thomas E. McKee
Publisher : Thomson South-Western
Page : 224 pages
File Size : 51,5 Mb
Release : 2005
Category : Business & Economics
ISBN : IND:30000102875279

Get Book

Earnings Management by Thomas E. McKee Pdf

Learn how to legally manage your earnings with EARNINGS MANAGEMENT! This finance text demystifies earnings management and provides you with 28 reasonable and legal techniques. Read this text and you will gain valuable knowledge about earning management concepts and tools and gain insight into the management decisions that can shape financial statements and the underlying quality of the earnings.

Author : Bianca Ahrens
Publisher : BoD – Books on Demand
Page : 282 pages
File Size : 55,6 Mb
Release : 2010
Category : Business & Economics
ISBN : 9783899369212

Get Book

Capital Market Implications of Earnings Quality by Bianca Ahrens Pdf

In his speech from 1998 the former chairman of the United States Securities and Exchange Commission (SEC) Arthur Levitt pointed out that trust "is the bedrock of our capital markets" and that this must not be shaken by the erosion of earnings quality. He made clear that it is the challenge of the whole financial community to counteract such a development. This thesis deals with the question whether the importance of earnings for the capital market varies with its quality. The question arises, because in recent years a large number of firm scandals has shaken the trust in the reliability of reported earnings. In order to properly address the research questions, the literature on earnings quality definitions, quality measures as well as implications of earnings quality on capital markets is reviewed and critically discussed. The author investigates whether well known results concerning capital market implications of earnings quality remain stable for all measures considered. She answers the question of how earnings quality affects firm value, cost of equity capital, and the accuracy of analysts' forecasts taking into account the effects of determinants of earnings quality.

Author : Patricia M. Dechow,Catherine Schrand
Publisher : Research Foundation of the Institute of Chartered Financial Analysts
Page : 152 pages
File Size : 46,5 Mb
Release : 2004-01-01
Category : Corporate profits
ISBN : 0943205689

Get Book

Earnings Quality by Patricia M. Dechow,Catherine Schrand Pdf

Author : Joshua Ronen,Varda Yaari
Publisher : Springer
Page : 0 pages
File Size : 40,6 Mb
Release : 2010-11-29
Category : Business & Economics
ISBN : 1441938354

Get Book

Earnings Management by Joshua Ronen,Varda Yaari Pdf

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?

Author : Silvia Ferramosca,Alessandro Ghio
Publisher : Springer
Page : 265 pages
File Size : 51,5 Mb
Release : 2018-03-13
Category : Business & Economics
ISBN : 9783319735887

Get Book

Accounting Choices in Family Firms by Silvia Ferramosca,Alessandro Ghio Pdf

This book provides a critical analysis of the current state of knowledge on the relationship between family firms and a wide range of accounting choices, including earnings management, accounting conservatism, and financial and non-financial disclosure. In examining the choices made in family firms, the authors explore and elucidate the relevance of agency, socioemotional wealth, stewardship, and resource-based theories. Readers will also find close consideration of the impacts of a country’s culture and societal values on accounting choices. In particular, further evidence is provided on the impact of different cultures on accounting conservatism in family businesses. Finally, avenues for future accounting research on family firms are discussed, highlighting theoretical and empirical challenges. In addition to offering a revealing analysis of the influence of ownership types and cultures on accounting choices within family firms, the book identifies significant practical implications for the management of family firms and policy implications for regulators and standard setters.

Author : Jayendu Patel,Richard Zeckhauser
Publisher : Unknown
Page : 52 pages
File Size : 45,8 Mb
Release : 1998
Category : Corporate profits
ISBN : 2854186125

Get Book

Earnings Management to Exceed Thresholds by Jayendu Patel,Richard Zeckhauser Pdf

Author : Riccardo Cimini
Publisher : G Giappichelli Editore
Page : 226 pages
File Size : 44,8 Mb
Release : 2015-01-16
Category : Business & Economics
ISBN : 9788834858813

Get Book

The selective misrepresentation of financial information due to earnings management by Riccardo Cimini Pdf

“The selective misrepresentation of financial information due to earnings management” has the primary aim to build an updated framework of the earnings management phenomenon, distinguishing, as the subtitle suggests, its theoretical aspects, the model specifications that scholars used to detect it and, furthermore, providing the empirical evidence about whether and how earnings management changed after the occurrence of certain events, by having as a reference the European countries. In the first chapter of the work, everyone interested in the theoretical aspects of earnings management can deepen its knowledge within the selective misrepresentation of financial information concept. In the second and in the third chapter, the reader can deepen the models which can be used to detect the misrepresentation of financial information due to earnings management. In this regard, we use an evolutionary approach to discuss the strengths and the weaknesses of the different methodologies that, over time, scholars used to detect earnings management. In detail, we discuss the so-called “first-generation” models, the ratio analysis and the “second-generation” models. In the fourth and in the fifth chapter, we investigate whether earnings management changed after the introduction of the IASB standards in the EU and the burst of the recent financial crisis. Finally, in the conclusions of the book, we discuss the most recent works published by scholars in academic journals, in order to identify the reasons why scholars continue to be interested in earnings management.

Author : Mark Clatworthy,Juan Manuel García Lara,Edward Lee
Publisher : Routledge
Page : 196 pages
File Size : 53,6 Mb
Release : 2021-05-13
Category : Business & Economics
ISBN : 9781000344660

Get Book

Accounting and Debt Markets by Mark Clatworthy,Juan Manuel García Lara,Edward Lee Pdf

Accounting and Debt Markets: Four Pieces on the Role of Accounting Information in Debt Markets provides novel and up-to-date evidence on the role of accounting information in debt markets Companies and organisations worldwide rely heavily on debt markets for short, medium and long-term financing, and debt markets and financial intermediaries have significant effects on the real economy. Accounting information has various functions in debt markets, including inter alia, informing pricing decisions and credit ratings, determining the allocation of creditor control rights and establishing bank capital adequacy requirements. The chapters in this book provide illustrative discussion, analysis and evidence on the importance of accounting information in credit markets. The first of the four pieces reflects on how a conservative financial reporting system helps firms obtain debt funds and with better conditions, and why this is the case. The second examines the effects of accounting disclosure on credit ratings of private companies and shows that accounting information is useful for credit rating agencies. The two final pieces reflect on how banks should account for credit losses, and on how regulators are tackling this issue. The chapters in this book were originally published as a special issue of Accounting and Business Research.