We show that firms 'in danger' of being delisted from a stock market (NASDAQ) report higher performance-adjusted discretionary accruals and the inflated accruals are associated with an increased likelihood of maintained listing. Accruals of firms 'in danger' are less positive in fiscal quarters...

This study investigates the relationship between corporate sustainability performance and earnings management practices in a European setting. We measure earnings management based on discretionary accruals (cash flow approach) and real activity management. Corporate sustainability performance is...

We show that firms 'in danger' of being delisted from a stock market (NASDAQ) report higher performance-adjusted discretionary accruals and the inflated accruals are associated with an increased likelihood of maintained listing. Accruals of firms 'in danger' are less positive in fiscal quarters...

I argue that external financial reporting quality has at best a 2nd order effect on firm value of U.S. publicly traded companies and that attempts to improve a firm's external reporting quality has a 3rd order effect on these firms' value. Recognizing that external financial reporting quality is...

Several studies have addressed, with conflicting results, the issue of procyclical effects of loan loss provisions in the past. More recently, the weak performance of incurred loss models in the financial crisis has given rise to a new debate on the sound design of credit risk provisioning...

Does earnings management, even though legal, hinder investor trust in reported earnings? Or do investors regard earnings management as a way for firms to convey private information, or simply as a neutral feature of financial reporting? We find that past abstinence from earnings management...

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...

This paper studies how investors infer CEO commitment to honesty from earnings management and how these perceptions – in conjunction with investors’ own social and moral preferences – shape their investment choices. We conduct two laboratory experiments simulating investment choices. Our...

Over the last decade, a large body of tax accounting literature on the association between book-tax conformity (BTC)/book-tax differences (BTD) and firms’ opportunistic reporting behavior has emerged. Yet, existing empirical evidence on the questions whether increased book-tax conformity...

Since 2010 a number of firms have voluntarily adopted mark-to-market (MTM) accounting for the actuarial gains and losses associated with their defined benefit pension plans. While pension accounting rules have allowed such a choice since 1986, only recently have firms begun to exercise that...