A significant amount of earnings management (EM) research has treated managers' EM decision processes as a “black box”. The objective of this study is to begin to open the black box though examining the relative importance of economic factors as well as ethical considerations in managers' EM...

Lobo and Zhou (2006) find an increase in accounting conservatism following the Sarbanes–Oxley Act of 2002. In Japan, the Financial Instruments and Exchange Act of 2006, the so-called Japanese Sarbanes–Oxley Act (J-SOX), was implemented for fiscal years ending on or after March 31, 2009....

We investigate whether managerial risk aversion, as measured by CEO political ideology, affects corporate decisions to undertake earnings management. Using a sample of 10,799 firm-year observations for S&P 1500 firms during the period from 1996 to 2008, we document that Republican CEOs, who tend...

We examine how clawback provisions and board monitoring affect managers' use of discretion to achieve earnings targets. Using an experiment, we find that when board monitoring is weak, imposing clawback provisions has little impact on the total amount of earnings management activity. This null...

We examine whether the information content of the earnings report, as captured by the earnings response coefficient (ERC), increases when investors' uncertainty about the manager's reporting objectives decreases, as predicted in Fischer and Verrecchia (2000). We use the 2006 mandatory...

The goal of this systematic literature review is to provide a detailed understanding of the determinants and consequences of clawback provisions in management compensation contracts, motivated by the increasing global regulatory, practical, and academic importance of implementing this new...

This study investigates how the mandatory adoption of International Financial Reporting Standards (IFRS) affects the contractual benefits of using accounting information to determine executive compensation in China. After controlling for firm and corporate governance characteristics, we find...

The purpose of our study is to further understand managerial incentives that affect the volatility of reported fiscal-year earnings. We do this by examining income smoothing based on pseudo fiscal years. For each firm, we create pseudo-year earnings using four consecutive quarters other than the...

The purpose of this study is to examine the impact of social relations among the board members on earnings management in Pakistani listed companies. Specifically, we have analyzed the social networks between CEO and outside board members. The modified Jones model has been used in this study to...

This study examines the impact of the ethnic diversity of executives on real earnings management (REM) using 21,217 firm-year observations for 2,209 U.S. public firms between 1993 and 2020. Social identity theory and top management team research suggest executive diversity enhances mutual...