This study investigates the effect of analyst coverage on both accrual-based and real earnings management. Regarding accrual-based earnings management, I find that firms followed by more analysts engage in less accruals management and that more experienced analysts seem to be more effective in constraining accruals management, consistent with the role of analysts as external monitors to manager...

in this research, role of accruals in elaboration of quality of earning of the companies accepted in mumbai stock exchange has been studied and relationship between quality of earning through accruals and its constituents and abnormal stock return has been studied. the studied sample includes 35 companies in group a of mumbai stock exchange in 2009-2013.fordata analysisandhypothesistesting mult...

This paper evaluates a comprehensive list of metrics proposed for detecting earnings management in a setting where managers manipulate earnings to round up reported EPS. I find that deferred tax expense is able to detect earnings management in the rounding-up setting while discretionary accruals models are not. Further analysis provides evidence that firms manipulate bad debt expense for the pu...

This study investigates the influence of ownership structure and board characteristics on discretionary accruals and real earnings management using the data of A-shares in Chinese Shanghai and Shenzhen Stock Exchange Securities Market from 2002 to 2012. The empirical results show that institutions with high shareholding proportion or great shareholding concentration give managers incentives to ...

We examine how the criteria for choosing estimation samples (peer firms) affect the ability to detect discretionary accruals, using several variants of the Jones (1991) model. Researchers commonly estimate accruals models in cross-section, and define the estimation sample as all firms in the same industry. We examine whether firm size performs at least as well as industry membership as the crit...

Prior research has investigated the association between executive equity compensation and earnings management but the evidence is not conclusive. We investigate this question using the quantile regression approach which allows the coefficient on the independent variable (equity compensation) to shift across the distribution of the dependent variable (earnings management). Based on a sample of 1...

This study examines the role of pre-IPO discretionary accruals in the valuation and first day initial returns of IPOs. We find that IPO offer price is unaffected whereas market closing price is positively associated with the levels of pre-IPO discretionary accruals for issuers with aggressively reported earnings. We also find that this relative over-valuation of managed earnings by the markets ...

We extend the analysis in Sloan (1996) to identify the source of information in accruals about earnings quality. Our results indicate that information in accruals about earnings quality is not limited to the current accruals analyzed by Sloan, but extends to non-current accruals. We also show that while information in accruals originates almost exclusively from asset accruals, liability accrual...