Previous literature on earnings management has examined the maintained hypothesis that firms barely beating earnings benchmarks are earnings manipulators with earnings before accounting manipulation otherwise slightly below their benchmarks and has implemented research designs that treat all...

​Prior studies of real-activity earnings management (REM) focus on earnings-inflating abnormal activities. We seek to establish the existence of downward REM by investigating several corporate events in which managers have incentives to temporarily deflate market valuations. Specifically, we...

Using income smoothing and its two components – the informational component and the garbled component – we examine whether and how the time-oriented tendency embedded in languages influences corporate financial reporting decisions. Separating languages into weak- versus strong- future time...

I find that managers manage earnings upward in the quarters preceding a debt-covenant violation, but downward in the quarter a violation occurs. And they continue to manage earnings downward while the firm remains in violation. Because this scenario can play out within a year, the use of yearly...

In this dissertation, I examine the impact of earnings management and expectations management on the usefulness of earnings and analyst forecasts in firm valuation. Earnings and analyst forecasts are important inputs into accounting valuation models. Their ability to reflect current and predict...

Using a sample of firms that have consecutive earnings growth for more than 20 quarters (earnings strings), I assess the relationship between earnings persistence and the extent to which investors are able to anticipate breaks of earnings strings. I find that firm-specific earnings persistence...

This study examines the predictive power of comprehensive income and its individual components within the homogenous institutional setting of German IFRS firms. The results could be relevant for the standard setters IASB and FASB and their joint project “Financial Statement Presentation”. We...

Asymmetric persistence of accounting income is often tested in a regression of changes in earnings on lagged changes in earnings, including an interaction term for negative changes (see Basu [1997] or Ball et al. [2009] for a recent overview). In this note we propose an alternative, but closely...

Previous literature investigates links between corporate social responsibility (CSR), earnings management (EM), and firm performance (FP) but has looked at pair-wise relations (CSR-EM, CSR-FP, and EM-FP) for one-way effects without considering endogeneity among the variables. We examine these...

Earnings management (EM) and its association with firm performance has been a subject of research interest for decades. This study re-examines the EM-firm performance nexus in a novel way using a nonlinear framework and introducing macro-economic misery index (MI) as a possible threshold...