The impact of the Chinese stimulus program on earnings management
Purpose: The purpose of this paper is to investigate the impacts of the 2008 Chinese stimulus program on earnings management. Design/methodology/approach: Using a sample period from 2004 to 2011 (per-stimulus period: 2004-2007 and post-stimulus period: 2008-2011), the authors compare the change in earnings management between the firms that received the stimulus funds and those that did not receive the stimulus funds. Findings: The authors find that from the pre- to post-stimulus period, the recipient firms experienced a greater increase in downward accrual management and a greater decrease in real management than the non-recipient firms did. This result is primarily driven by the non-state-owned enterprises and firms using non-Big-Four auditors. Originality/value: The results suggest that the earnings management level is ultimately determined by the underlying economic and political factors influencing managers’ and auditors’ incentives (Cohen, 2008; Ball et al., 2003). Meanwhile, some mechanisms, such as high-quality audit (Eshleman and Guo, 2014) and state ownership (Wang and Yung, 2011) can also play a role in determining the level of earnings management.
Year of publication: |
2019
|
---|---|
Authors: | Hao, Qian ; Shi, Xiangyan ; Bu, Danlu ; Li, Liaoliao |
Published in: |
International Journal of Accounting & Information Management. - Emerald, ISSN 1834-7649, ZDB-ID 2406360-5. - Vol. 27.2019, 4 (07.10.), p. 653-670
|
Publisher: |
Emerald |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
The Chinese stimulus program from 2008 to 2010 and accounting information quality
Hao, Qian, (2018)
-
Financial background of controlling shareholder and corporate financialization
Shi, Xiangyan, (2021)
-
Official rotation and corporate innovation : evidence from the governor rotation
Shi, Xiangyan, (2020)
- More ...