This study investigates the effect of a security regulation that occurs concomitantly with International Financial Reporting Standards (IFRS) adoption on the information content of earnings announcements in Italy. To identify the effect of this regulation, we use a treatment (i.e., Italy) and a...

Managers have a variety of tools at their disposal to influence stakeholder perceptions. Earnings management and the strategic reporting of non‐GAAP earnings are just two of the available menu choices. We explore how real earnings management and accruals management influence the probability...

This paper investigates a particular scenario under the Brazilian Generally Accepted Accounting Principles before IFRS adoption, which require public companies to disclose individual financial statements (legal parent entity), together with consolidated financial statements (economic entity)....

We study the causal effects of short selling on real earnings management by exploiting an exogenous shock to short selling costs under the pilot program of Regulation SHO. We find the removal of short selling constraints leads to a reduction of real earnings management in pilot firms relative to...

Using a novel dataset, we show that components of firms' GAAP earnings stemming from ancillary business activities or transitory shocks are significant in frequency and magnitude. These components have grown over time and are dispersed across various sections of the 10-K. Excluding them from...

This paper finds that the initiation of trading in credit default swaps (CDS) improves earnings quality by reducing absolute abnormal earnings accruals through specific channels in CDS firms. CDS initiation brought about more private information discovery via financial analysts, cross-market...

This paper investigates the use of earnings management by cooperatives to avoid reporting losses or earnings decreases. Based on a unique dataset comprising quarterly financial statements reported by 66 Brazilian agricultural cooperatives between 2000 and 2015, our results show that cooperatives...

We investigate whether income smoothing affects the usefulness of earnings for contracting through the monitoring role of earnings-based debt covenants. First, we examine initial contract design and predict that income smoothing will increase (decrease) the use of earnings-based covenants if...

We investigate whether income smoothing affects the usefulness of earnings for contracting through the monitoring role of earnings-based debt covenants. First, we examine initial contract design and predict that income smoothing will increase (decrease) the use of earnings-based covenants if...

We examine how compensation of chief executive officer (CEO) and corporate governance practices affect earnings management behavior in an emerging economy, Pakistan. Using 1836 firm-year observations from 260 firms listed in KSE for period 2005 to 2012, we do not find that CEO compensation has...