We investigate whether income smoothing affects the usefulness of earnings for contracting through the monitoring role … of earnings-based debt covenants. First, we examine initial contract design and predict that income smoothing will … increase (decrease) the use of earnings-based covenants if income smoothing improves (reduces) the usefulness of earnings to …

Using income smoothing and its two components – the informational component and the garbled component – we examine … to smooth earnings more. We also find that the informational component, rather than the garbled component, of income … smoothing is stronger for firms in weak-FTR countries, indicating that income smoothing in weak-FTR countries enhances the …

recurring and non-recurring components of net income and forecasts future performance. Analysts and market participants are slow …

-year earnings. We do this by examining income smoothing based on pseudo fiscal years. For each firm, we create pseudo-year earnings …-year earnings. We find that this measure of income smoothing behaves as expected in a variety of cross-sectional tests. Moreover, we … intentional income smoothing than with the integral approach to accounting. Our evidence is consistent with income smoothing being …

income smoothing and hence reduce information asymmetry for firms operating in highly uncertain environment to maximize the … stock price. This paper measures income smoothing by the negative correlation of a firm's change in discretionary accruals …