دانلود رایگان مقاله انگلیسی آیا معیار غلبه مدیریت درآمد را تشخیص می دهد؟ شواهد ناشی از بی نظمی حسابداری - الزویر 2018

ABSTRACT

We examine whether meeting or slightly beating an earnings benchmark (benchmark-beating) is (1) associated with accounting irregularities, an extreme and certain case of earnings management, (2) useful for detecting accounting irregularities both incremental and relative to discretionary accruals and to F-scores (Dechow, Ge, Larson, & Sloan, 2011), and (3) more useful for detecting opportunistic accounting irregularities, a more harmful form of earnings manipulation identified in Badertscher, Collins, and Lys (2012), than accounting irregularities in general. We identify an accounting irregularity sample where earnings are restated due to intentional misreporting and construct a control sample where earnings are not restated. We find that benchmark-beating is significantly positively associated with the probability of accounting irregularities after controlling for other determinants of accounting irregularities. In addition, benchmark-beating is useful for detecting accounting irregularities incremental to discretionary accruals and F-scores; benchmark-beating ties with and sometimes outperforms discretionary accruals for detecting accounting irregularities in a one-on-one horse race but is dominated by F-scores. Finally, benchmark-beating is more useful for detecting opportunistic accounting irregularities than accounting irregularities in general. Overall, we contribute to the literature by validating benchmark-beating as a proxy for earnings management.

5. Conclusion

Prior literature commonly uses firms that meet or slightly beat an earnings benchmark (e.g., earnings of the same quarter last year, zero earnings, or consensus analyst earnings forecasts) as a proxy for earnings management. However, there is only limited evidence in the extant literature linking benchmark-beating to unequivocal earnings management. As Dechow et al. (2010) point out, “[t]the totality of the evidence indicates that the use of small profits as a proxy for earnings management more generally is unsubstantiated.” We seek to provide evidence on a link between benchmark-beating and earnings management in this paper. In addition, we investigate whether benchmarkbeating is useful for detecting accounting irregularities both incremental and relative to discretionary accruals and F-scores, and whether it is more useful for detecting opportunistic accounting irregularities than accounting irregularities in general.

We identify a sample of irregularity firms that restate their earnings due to intentional misreporting and construct a control sample where earnings are not restated. First, we compare the benchmark-beating sample with the non-benchmark-beating sample. In univariate analyses, we find that benchmark beaters are 21.74% - 66.28% more likely to intentionally misreport earnings than non-benchmark beaters. Our multivariate regression results are consistent with the univariate evidence and suggest that benchmark beaters are 31.00% - 76.83% more likely to intentionally misreport earnings than non-benchmark beaters after controlling for other determinants of misreporting.