Introduction to Earnings Management (eBook)

Malek El Diri (Autor)

eBook Download: PDF

2017 | 1st ed. 2018
IX, 113 Seiten
Springer International Publishing (Verlag)
978-3-319-62686-4 (ISBN)

Infos

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.

Inhalt

Contents 6
Chapter 1: Introduction 9
1.1 Introduction 9
1.2 Book Structure 10
References 11
Chapter 2: Definitions, Activities, and Measurement of Earnings Management 13
2.1 Introduction 13
2.2 Definitions 14
2.2.1 Earnings Management Definition 14
2.2.2 The Difference Between Earnings Management and Fraud 16
2.2.3 The Difference Between Earnings Management and Earnings Quality 18
2.2.4 The Difference Between Earnings Management and Impression Management 18
2.2.5 The Difference Between Earnings Management and Expectation Management 20
2.3 Earnings Management Activities 21
2.3.1 Accrual and Real Earnings Management 21
2.3.2 Earnings Smoothing 22
2.3.3 Income Shifting 24
2.3.4 Advanced Techniques 24
2.3.5 The Trade-Off Between Earnings Management Activities 25
2.4 Accrual Earnings Management Models 27
2.4.1 The Ronen and Sadan Model 27
2.4.2 The Healy Model 28
2.4.3 The DeAngelo Model 29
2.4.4 The Industry-Based Model 29
2.4.5 The Jones Model 30
2.4.6 The Modified Jones Model (Dechow et al. 1995) 32
2.4.7 The Forward-Looking Model 33
2.4.8 The Competing-Component Model (The K S Model) 34
2.4.9 The Cash-Flows Model 35
2.4.10 The Cash-Flows Jones Model 35
2.4.11 The Performance-Matching Model 36
2.4.12 The Business Model 37
2.4.13 The Stubben Model 37
2.4.14 The Single-Item Models 38
2.4.15 The Distributional Approach 38
2.4.16 Evaluation of Accrual Earnings Management Models 39
2.5 Real Earnings Management Models 40
2.5.1 The Roychowdhury Model 40
2.5.2 The Gunny Model 42
2.5.3 Evaluation of Real Earnings Management Models 43
2.6 Special Measures of Earnings Management 44
2.6.1 Combined Models 44
2.6.2 Earnings Management Measures in the Financial Sector 45
2.6.3 Earnings Management in Qualitative Research 46
2.7 Conclusions 47
References 48
Chapter 3: Theoretical Framework 53
3.1 Introduction 53
3.2 Firm Theory 54
3.3 Agency Theory 54
3.4 Revelation Principle 56
3.4.1 Contracting Theory 58
3.4.2 Bounded Rationality 61
3.4.3 Information Asymmetry 62
3.5 Earnings Management Theories 64
3.5.1 The Costly Contracting Approach 65
3.5.2 The Decision-Making Approach 65
3.5.3 The Legal-Political Approach 66
3.6 Conclusions 67
References 68
Chapter 4: Motives of Earnings Management 70
4.1 Introduction 70
4.2 Earnings Management vs. Truth Telling 70
4.3 Contracting Motives of Earnings Management 73
4.3.1 Management Compensation 73
4.3.2 CEO Turnover 75
4.3.3 Managerial Ability 76
4.3.4 Corporate Governance System 79
4.3.4.1 Ownership 79
4.3.4.2 Board of Directors 80
4.3.4.3 Audit Committee 81
4.3.5 Loans 82
4.3.6 Firm Characteristics 82
4.4 Capital Market Motives of Earnings Management 83
4.4.1 Stock Market 83
4.4.2 Issuance of Equity 85
4.4.3 New Listing and Cross-listing 86
4.4.4 Mergers and Acquisitions 86
4.4.5 Insider Trading 87
4.4.6 Management Buyouts 88
4.4.7 Meeting or Beating a Benchmark 88
4.4.8 Analysts 89
4.5 Third-Party Motives of Earnings Management 90
4.5.1 Industry 90
4.5.2 Industrial Diversification 92
4.5.3 Regulations 92
4.5.4 Political Environment and Country-Specific Policies 93
4.5.5 Accounting Standards 94
4.5.6 Tax Considerations 94
4.5.7 Competitors 95
4.5.8 Suppliers and Customers 98
4.5.9 Auditors 98
4.5.10 Other Gatekeepers 99
4.6 Conclusions 100
References 102
Chapter 5: Summary 116
5.1 Overview of the Definitions, Activities, and Measurement of Earnings Management 116
5.2 Overview of the Theoretical Framework of Earnings Management 116
5.3 Overview of the Motives of Earnings Management 117
Bibliography 118

Produkt-Details

• Erscheint lt. Verlag: 20.8.2017
• Zusatzinfo: IX, 113 p.
• Verlagsort: Cham
• Sprache: englisch
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Finanzierung
• Schlagworte: Agent Theory • Banking • Capital Market • Earning Motives • Firm Theory • Revelation Principle • Revenue Management • trade off
• ISBN-10: 3-319-62686-8 / 3319626868
• ISBN-13: 978-3-319-62686-4 / 9783319626864