Corporate Earnings: Facts and Fiction
Manipulated earnings played a central role in the slew of corporate scandals which surfaced during the last three years. This article focuses on the vulnerability of earnings to manipulation by managers: it surveys the empirical record of manipulation, their major objectives, and the means of manipulation. It then focuses on the major source of earnings manipulation--the multitude of estimates and subjective judgments underlying the comutation of earnings. The article accordingly concludes with a proposal to curb manipulation by requiring managers to routinely compare key estimates with ex post realizations, and revise earnings in case of large deviations.
Year of publication: |
2003
|
---|---|
Authors: | Lev, Baruch |
Published in: |
Journal of Economic Perspectives. - American Economic Association - AEA. - Vol. 17.2003, 2, p. 27-50
|
Publisher: |
American Economic Association - AEA |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Earnings Component Volatilities : Capital Versus R&D Expenditures
Lev, Baruch, (2021)
-
ESG did not immunize stocks during the COVID‐19 crisis, but investments in intangible assets did
Demers, Elizabeth, (2021)
-
Financial statement analysis : a new approach
Lev, Baruch, (1974)
- More ...