Access the full text.
Sign up today, get DeepDyve free for 14 days.
R. Merton (1987)
Presidential Address: A simple model of capital market equilibrium with incomplete information
Tim Loughran, J. Ritter (1997)
The Operating Performance of Firms Conducting Seasoned Equity OfferingsJournal of Finance, 52
I. Kellogg, Loren Kellogg (1991)
Fraud, window dressing, and negligence in financial statements
(1989)
Annual Report 1989: Executive Compensation
A. Sweeney (1994)
Debt-covenant violations and managers' accounting responsesJournal of Accounting and Economics, 17
John Friedlan (1994)
Accounting Choices of Issuers of Initial Public OfferingsContemporary Accounting Research, 11
(1993)
An Empirical Investigation of Short Interests
M. Zmijewski, R. Hagerman (1981)
An income strategy approach to the positive theory of accounting standard setting/choiceJournal of Accounting and Economics, 3
Richard Frankel, M. McNichols (1995)
Discretionary Disclosure and External FinancingAccounting review: A quarterly journal of the American Accounting Association, 70
Srinivasan Rangan (1995)
Earnings around Seasoned Equity Offerings: Are They Overstated?
James Brickley, C. James (1987)
The Takeover Market, Corporate Board Composition, and Ownership Structure: The Case of BankingThe Journal of Law and Economics, 30
Charles Lee, Belinda Mucklow, M. Ready (1993)
Spreads, Depths, and the Impact of Earnings Information: An Intraday AnalysisReview of Financial Studies, 6
Watts Watts, Zimmerman Zimmerman (January 1990)
Positive Accounting Theory: A Ten Year PerspectiveAccounting Review, 65
L. Brown, Jerry Han (2008)
The Impact of Annual Earnings Announcements on Convergence of BeliefsFox: Accounting (Topic)
Palmrose Palmrose (January 1988)
Analysis of Auditor Litigation and Audit Service QualityAccounting Review, 63
Eric Press, J. Weintrop (1990)
Accounting-based constraints in public and private debt agreements: Their association with leverage and impact on accounting choiceJournal of Accounting and Economics, 12
S. Teoh, I. Welch, Teresa Wong (1998)
Earnings Management and the Post-Issue Underperformance in Seasoned Equity OfferingsThe Finance
Narasimhan Jegadeesh, A. Subrahmanyam (1993)
Liquidity Effects of the Introduction of the S&P 500 Index Futures Contract on the Underlying StocksThe Journal of Business, 66
Oliver Kim, Robert Verrecchia (1994)
Market liquidity and volume around earnings announcementsJournal of Accounting and Economics, 17
Journal of Law & Economics, 30
B. Lev (1992)
Information Disclosure StrategyCalifornia Management Review, 34
Stuart Rosenstein, Jeffrey Wyatt (1990)
Outside directors, board independence, and shareholder wealth☆Journal of Financial Economics, 26
Joanne Duke, Herbert Hunt (1990)
An empirical examination of debt covenant restrictions and accounting-related debt proxiesJournal of Accounting and Economics, 12
S. Teoh, T. Wong, G. Rao (1994)
Incentives and opportunities for earnings management in initial public offerings
Ehsan Feroz, Kyungjoo Park, Victor Pastena (1991)
The Financial and Market Effects of the SEC's Accounting and Auditing Enforcement ReleasesForensic Economics eJournal
M. Weisbach (1988)
Outside directors and CEO turnoverJournal of Financial Economics, 20
Tim Loughran, J. Ritter (1995)
The New Issues PuzzleJournal of Finance, 50
Mark Lang, Russell Lundholm (1993)
CROSS- SECTIONAL DETERMINANTS OF ANALYST RATINGS OF CORPORATE DISCLOSURESJournal of Accounting Research, 31
R. Atiase, Linda Bamber (1994)
Trading volume reactions to annual accounting earnings announcements: The incremental role of predisclosure information asymmetry☆Journal of Accounting and Economics, 17
J. Ritter (1991)
The Long-Run Performance of Initial Public OfferingsJournal of Finance, 46
Clifford Smith, R. Watts (1992)
The Investment Opportunity Set and Corporate Financing, Dividend, and Compensation PoliciesJournal of Financial Economics, 32
Patricia Dechow, Richard Sloan, A. Sweeney (1994)
DETECTING EARNINGS MANAGEMENTAccounting review: A quarterly journal of the American Accounting Association, 70
Healy Healy (April 1985)
The Effects of Bonus Schemes on Accounting DecisionsJournal of Accounting and Economics, 7
P. Brous (1992)
Common Stock Offerings and Earnings Expectations: A Test of the Release of Unfavorable InformationJournal of Finance, 47
Incidence and Circumstances of Accounting Errors
Amihud Amihud, Mendelson Mendelson (1986)
Asset Pricing and the Bid‐Ask SpreadJournal of Financial Economics, 17
Journal of Accounting and Economics, 17
Schipper Schipper (1989)
Commentary on earnings managementAccounting Horizons, 3
Stanley Baiman, Robert Verrecchia (1995)
Earnings and price-based compensation contracts in the presence of discretionary trading and incomplete contractingJournal of Accounting and Economics, 20
Mark Defond, J. Jiambalvo (1993)
Factors Related to Auditor-Client Disagreements over Income-Increasing Accounting Methods*Contemporary Accounting Research, 9
G. Benston, R. Hagerman (1974)
Determinants of bid-asked spreads in the over-the-counter marketJournal of Financial Economics, 1
D. Spiess, J. Affleck-Graves (1995)
Underperformance in long-run stock returns following seasoned equity offeringsJournal of Financial Economics, 38
R. Romano (1991)
The Shareholder Suit: Litigation without Foundation?Journal of Law Economics & Organization, 7
(1995)
The Impact of Annual Report Disclosure Level on Investor Base and the Cost of Capital
A. Cowan, Richard Carter, Frederick Dark, Ashutosh Singh (1992)
Explaining the NYSE Listing Choices of NASDAQ FirmsFinancial Management, 21
K. Palepu, P. Healy (1993)
The Effect of Firms' Financial Disclosure Strategies on Stock Prices
J. Aharony, Chan-Jane Lin, Martin Loeb (1993)
Initial Public Offerings, Accounting Choices, and Earnings Management*Contemporary Accounting Research, 10
L. Deangelo (1981)
Auditor size and audit qualityJournal of Accounting and Economics, 3
Feroz Feroz, Park Park, Pastena Pastena (1991)
The Financial and Market Effects of the SEC's Accounting and Auditing Enforcement ReleasesJournal of Accounting Research, 29
J. Jones (1991)
Earnings Management During Import Relief InvestigationsJournal of Accounting Research, 29
P. Healy, K. Palepu, Amy Hutton (1995)
Do Firms Benefit from Expanded Voluntary Disclosure
Gerald Feltham, John Hughes, D. Simunic (1991)
Empirical assessment of the impact of auditor quality on the valuation of new issuesJournal of Accounting and Economics, 14
Andrew Christie (1990)
Aggregation of test statistics: An evaluation of the evidence on contracting and size hypothesesJournal of Accounting and Economics, 12
Abstract. This study investigates firms subject to accounting enforcement actions by the Securities and Exchange Commission for alleged violations of Generally Accepted Accounting Principles. We investigate: (i) the extent to which the alleged earnings manipulations can be explained by extant earnings management hypotheses; (ii) the relation between earnings manipulations and weaknesses in firms' internal governance structures; and (iii) the capital market consequences experienced by firms when the alleged earnings manipulations are made public. We find that an important motivation for earnings manipulation is the desire to attract external financing at low cost. We show that this motivation remains significant after controlling for contracting motives proposed in the academic literature. We also find that firms manipulating earnings are: (i) more likely to have boards of directors dominated by management; (ii) more likely to have a Chief Executive Officer who simultaneously serves as Chairman of the Board; (iii) more likely to have a Chief Executive Officer who is also the firm's founder, (iv) less likely to have an audit committee; and (v) less likely to have an outside blockholder. Finally, we document that firms manipulating earnings experience significant increases in their costs of capital when the manipulations are made public. Résumé. Les auteurs analysent les entreprises assujetties aux mesures d'exécution prises par la Securities and Exchange Commission dans les cas de présomption de transgression des principes comptables généralement reconnus. Ils s'intéressent aux aspects suivants de la question: i) la mesure dans laquelle les présomptions de manipulations des bénéfices peuvent être expliquées par les hypothèses existantes de gestion des bénéfices; ii) la relation entre les manipulations de bénéfices et les faiblesses des structures de régie interne des entreprises; et iii) la réaction du marché financier à l'endroit des entreprises au sujet desquelles les présomptions de manipulation des bénéfices sont rendues publiques. Les auteurs constatent qu'un incitatif majeur à la manipulation des bénéfices est le désir d'obtenir du financement externe à moindre coût. Ils démontrent que cet incitatif demeure important même après le contrôle des motifs contractuels que mettent de l'avant les travaux théoriques. Ils constatent également que les entreprises qui manipulent les bénéfices sont: i) davantage susceptibles d'avoir des conseils d'administration dominés par la direction; ii) davantage susceptibles d'avoir un chef de la direction qui joue simultanément le rôle de président du conseil; iii) davantage susceptibles d'avoir un chef de la direction qui est également le fondateur de l'entreprise; iv) moins susceptibles d'avoir un comité de vérification; et v) moins susceptibles d'avoir un bloc de titres détenus par un actionnaire extérieur. Enfin, les auteurs établissent le fait que le coût du capital, pour les entreprises qui manipulent les bénéfices, enregistre des hausses appréciables lorsque ces manipulations sont rendues publiques.
Contemporary Accounting Research – Wiley
Published: Mar 1, 1996
Read and print from thousands of top scholarly journals.
Already have an account? Log in
Bookmark this article. You can see your Bookmarks on your DeepDyve Library.
To save an article, log in first, or sign up for a DeepDyve account if you don’t already have one.
Copy and paste the desired citation format or use the link below to download a file formatted for EndNote
Access the full text.
Sign up today, get DeepDyve free for 14 days.
All DeepDyve websites use cookies to improve your online experience. They were placed on your computer when you launched this website. You can change your cookie settings through your browser.