Article history: Received 17 July 2014 Received in revised form 18 March 2015 Accepted 2 April 2015 Available online 9 April 2015 This study investigates whether earnings management reduces the level of value relevance and whether good corporate governance restrains earnings management. Using hand-collected data comprising 1012 firm-year observations from all companies listed on the Shanghai SS...

This paper examines, whether market participants differently assess the information uncertainty associated with earnings management depending on the degree of income smoothing. Hypothesis tests using annual data for 850 firms listed on German stock exchanges for the years 1990 to 2003 show that firm years with low (high) degrees of earnings management display lower (higher) degrees of informati...

Most of the current research on earnings management focuses on the detection of abnormal accruals. The purpose of this study is to detect manipulation of real activities to meet earnings targets. I analyze cash flow from operations (CFO), production costs and discretionary expenses. Using a simple model to determine the normal levels of these variables, I detect abnormally low CFO and abnormall...

a r t i c l e i n f o JEL classification: G3 C8 M4 M1 Keywords: Data mining Bayesian network (BN) Back propagation neural network (BPN) Principal component analysis (PCA) C5.0 decision tree Accrual earnings management The characteristic of long value chain, high-risk, high cost of research and development are belong to high knowledge based content in the biotech medical industry, and the reliab...

Do Employees Profit from Profit Sharing? Evidence from Canadian Panel Data Using panel data from a large sample of Canadian establishments, this paper examines whether employee earnings increase, decrease, or do not change in the period subsequent to adoption of profit sharing, relative to establishments that do not adopt profit sharing. Our research contributes to knowledge by utilizing longit...

This paper provides a rational explanation for earnings discontinuity in the context of the agency model. A company manager often possesses private information about the project’s expected return. This information is valuable to the firm because early warning that a project is unlikely to succeed allows the firm to fire the manager and to discontinue a project with an expected loss. When issuin...

SYNOPSIS: Earnings management remains a popular topic of debate and discussion among investors, regulators, analysts, and the public. One mechanism that might mitigate earnings management is auditors’ industry expertise. Using a large sample of clients of Big 6 auditors, this research examines the association between auditor industry expertise, measured in terms of both auditor market share in ...