This paper examines the impact of outside block-holders on earnings management, using discretionary accounting accruals as the measure of earnings management. For the income-decreasing earnings management scenario, we do not find significant results. This may be attributable to the different...

Section 340f of the German Commercial Code allows banks to provision against the special risks inherent to the banking business by building hidden reserves. Beyond risk provisioning, these reserves are implicitly accepted as an earnings management device. By analyzing financial statements of...

This study investigates the effect of window dressing by Taiwanese firms on investors' stock returns. The second digit of the earnings reported as earnings before interest and tax, earnings after interest and tax, or earnings per share is found to occasionally serve as the reference point. In...

Chinese authorities hoped that participation of foreign strategic investors (FSIs) could improve the profitability of Chinese banks both quantitatively and qualitatively. While past studies have typically focused on the effect of FSIs on banks' quantitative performance, this paper investigates...

This study examines the relationship between illegal insider trading and corporate governance. We analyze a sample of 156 cases: seventy-eight firms having illegal insider trading episodes and seventy-eight matched firms. We use three main factors—board composition, ownership structure, and...

The objective of this paper is to ascertain whether Islamic banks do in fact manage profit distributions and if so, what factors are associated with the extent of profit distribution management. The results suggest that most Islamic banks manage profit distributions, with the extent of profit...

This study investigates the relation between managerial overconfidence and earnings management and whether this relation is moderated by family control. Using a sample of Taiwan-listed firms, we estimate managerial overconfidence from manager dealings and determine the following: First,...

This paper formalizes a two-step representation of accounting measurement and uses it to formalize a general rationale for conservatism as a measurement principle. A transaction's economic substance manifests itself in characteristics of the transaction, and an accounting rule is a mapping from...

We study whether Chinese CEOs with financial experience engage in more earnings management or less earnings management than those without such experience. In doing so, we distinguish between accrual-based earnings management and real earnings management. Overall, we find that CEOs with financial...

We investigate whether the adoption of International Financial Reporting Standards (IFRS) in Greece affected tax-induced incentives for financial earnings management. Prior to the implementation of IFRS, there were powerful incentives for firms facing higher tax pressure to restrict (exacerbate)...