Using a large sample of earnings announcements made by firms belonging to Korean chaebols, we examine propping (i.e., negative tunneling) within a chaebol. Consistent with the market's ex-ante valuation of intra-group propping, we find that the announcement of increased (decreased) earnings over...

This paper studies how the investors' attitude towards earnings surprises affects the managers' incentives to manipulate earnings in an intertemporal context, where the consensus forecast of the analysts is not exogenously given but determined by the strategic interaction between the analysts...

We complement recent research (Ball et al. 2003) which suggests that country-level incentives (i.e. legal origin and the level of capital market development) are the main determinants of the quality of financial reporting. Using a newly developed Brazilian Corporate Governance Index (BCGI) we...

By employing the theoretical template provided by agency theory, this paper contributes a detailed clinical analysis of a large multinational Canada-headquartered telecommunications company, Nortel. Our analysis reveals a 21st century norm of usual suspects: a CEO whose compensation is well...

We analyze the effect of external financing concerns on managers' financial reporting behavior prior to management buyouts (MBOs). Prior studies hypothesize that managers intending to undertake an MBO have an incentive to manage earnings downward to reduce the purchase price. We hypothesize that...

This paper examines the relation between earnings management and the marginal cost of debt to the firm using a sample of traded corporate bonds for the period 1994-2005. The marginal cost of debt is captured by market determined yield spreads, while earnings management is proxied by three...

We examine earnings management behavior around SEOs, focusing on both real activities and accrual-based manipulation. Although research has addressed the issues of earnings management around SEOs and earnings management via real activities manipulation, ours is the first paper to put these two...

We examine the characteristics of accounting numbers using a sample of German companies reporting under IAS (2000-2002), and IFRS (2003-2004) and (2005-2006). We investigate the change in accounting quality during these time periods as IASB revises and issues new standards. Contrary to...

This paper explains the variations in incidence of accounting fraud across economic settings by putting the behavior and motivation of managers under the microscope. To safeguard their reputation in the managerial labor market, managers of firms that perform poorly are prone to fraudulently...

In the last years banks and firms relationship in Italy has experienced deep changes due to a new revised national and international regulation and to an increasing globalization of economic environment. These evolutions imply a new bank-firm relationship with a deeper disclosure, in a...