Earnings Management to Exceed Thresholds
Earnings provide important information for investment decisions. Thus executives--who are monitored by investors, directors, customers, and suppliers--acting in self-interest and at times for shareholders, have strong incentives to manage earnings. We introduce behavioral thresholds for earnings management. A model shows how thresholds induce specific types of earnings management. Empirical explorations identify earnings management to exceed each of three thresholds: report of positive profits, sustain recent performance, and meet analysts' expectations. The positive profits threshold proves predominant. The future performance of firms that have possibly boosted earnings just across a threshold appears poorer than that of less suspect control groups
Year of publication: |
[1998]
|
---|---|
Authors: | Degeorge, Francois |
Other Persons: | Patel, Jayendu (contributor) ; Zeckhauser, Richard J. (contributor) |
Publisher: |
[1998]: [S.l.] : SSRN |
Description of contents: | Abstract [papers.ssrn.com] |
Saved in:
Saved in favorites
Similar items by person
-
Earnings management to exceed thresholds
Degeorge, François, (1999)
-
Earnings management to exceed thresholds
Degeorge, François, (1998)
-
Earnings Management to Exceed Thresholds.
Degeorge, Francois, (1999)
- More ...