Access the full text.
Sign up today, get DeepDyve free for 14 days.
Don Herrmann, Tatsuo Inoue, W. Thomas (2003)
The Sale of Assets to Manage Earnings in JapanJournal of Accounting Research, 41
Promulgation
Healy Healy (1985)
The effect of bonus schemes on accounting decisionsJournal of Accounting and Economics, 17
Greg Clinch, Joseph Magliolo (1993)
CEO compensation and components of earnings in bank holding companiesJournal of Accounting and Economics, 16
Carla Hayn (1995)
The information content of lossesJournal of Accounting and Economics, 20
Susan Moyer (1990)
Capital adequacy ratio regulations and accounting choices in commercial banksJournal of Accounting and Economics, 13
Hand Hand (1990)
A test of the extended functional fixation hypothesisThe Accounting Review, 65
Shiing-wu Wang, Jerry Han (1997)
Political Costs and Earnings Management of Oil Companies in the 1990 Persian Gulf CrisisThe Accounting Review, 73
L. Brown, R. Hagerman, P. Griffin, M. Zmijewski (2008)
An Evaluation of Alternative Proxies for the Market's Assessment of Unexpected EarningsCapital Markets: Market Efficiency eJournal
In-Hu Haw, K. Jung, Steven Lilien (1991)
Overfunded defined benefit pension plan settlements without asset reversionsJournal of Accounting and Economics, 14
Promulgation
Anne Beatty, Sandra Chamberlain, Joseph Magliolo (1995)
MANAGING FINANCIAL REPORTS OF COMMERCIAL-BANKS - THE INFLUENCE OF TAXES, REGULATORY CAPITAL, AND EARNINGSJournal of Accounting Research, 33
Lakshmanan Shivakumar (2000)
Do Firms Mislead Investors by Overstating Earnings Before Seasoned Equity Offerings?SPGMI: Compustat Fundamentals (Topic)
K. Chen, Michael Schoderbek (2000)
The 1993 Tax Rate Increase and Deferred Tax Adjustments: A Test of Functional FixationJournal of Accounting Research, 38
Zhou Zhi-pin (2003)
Comment On Earnings Management
Robert Bushman, Abbie Smith (2001)
Financial Accounting Information and Corporate GovernanceJournal of Financial Abstracts eJournal
Eli Bartov (1993)
The Timing of Asset Sales and Earnings ManipulationsCorporate Governance & Accounting eJournal
Mark Defond, T. Wong, Shuhua Li (1999)
The Impact of Improved Auditor Independence on Audit Market Concentration in ChinaUSC Marshall School of Business Research Paper Series
J. Aharony, J. Aharony, Chi-Wen Lee, T. Wong (2000)
Financial Packaging of IPO Firms in ChinaCorporate
DeAngelo DeAngelo (1986)
Accounting numbers as market valuation substitutes: A study of management buyouts of public stockholdersThe Accounting Review, 61
S. Teoh, T. Wong, G. Rao (1994)
Incentives and opportunities for earnings management in initial public offerings
Brown Brown, Griffin Griffin, Hagerman Hagerman, Zmijewski Zmijewski (1987)
An evaluation of alternative proxies for the market's assessment of unexpected earningsJournal of Accounting and Economics, 9
Bushman Bushman, Smith Smith (2001)
Financial accounting information and corporate governanceJournal of Accounting and Economics, 32
R. Watts, J. Zimmerman (2006)
Positive Accounting Theory: A Ten Year Perspective
Myron Scholes, G. Wilson, Mark Wolfson (1990)
Tax Planning, Regulatory Capital Planning, and Financial Reporting Strategy for Commercial BanksReview of Financial Studies, 3
M. McNichols (2000)
Research design issues in earnings management studiesJournal of Accounting and Public Policy, 19
Jennifer Gaver, K. Gaver (1998)
The Relation between Nonrecurring Accounting Transactions and CEO Cash Compensation
Patricia Dechow, Richard Sloan, A. Sweeney (1994)
DETECTING EARNINGS MANAGEMENTAccounting review: A quarterly journal of the American Accounting Association, 70
Douglas Skinner (1993)
The investment opportunity set and accounting procedure choice: Preliminary evidence☆Journal of Accounting and Economics, 16
D. Collins, S. Kothari (1989)
An analysis of intertemporal and cross-sectional determinants of earnings response coefficientsJournal of Accounting and Economics, 11
Peter Easton, M. Zmijewski (1989)
Cross-sectional variation in the stock market response to accounting earnings announcements☆Journal of Accounting and Economics, 11
T. Wong, S. Teoh (1993)
Perceived Auditor Quality and the Earnings Response CoefficientAccounting review: A quarterly journal of the American Accounting Association, 68
Cahan Cahan (1992)
The effect of antitrust investigations on discretionary accruals: A refined test of the political cost hypothesisThe Accounting Review, 65
L. Deangelo (1988)
Managerial competition, information costs, and corporate governance: The use of accounting performance measures in proxy contests☆Journal of Accounting and Economics, 10
S. Kothari, A. Leone, Charles Wasley (2002)
Performance Matched Discretionary Accrual MeasuresMIT Sloan School of Management Working Paper Series
I. Haw, Kyungjoo Park, D. Qi, Woody Wu (2003)
Audit Qualification and Timing of Earnings Announcements: Evidence from ChinaEar and Hearing, 22
Kothari Kothari, Leone Leone, Wasley Wasley (2004)
Performance matched discretionary accrual measuresJournal of Accounting and Economics
Julie Collins, Douglas Shackelford, James Wahlen (1995)
BANK DIFFERENCES IN THE COORDINATION OF REGULATORY CAPITAL, EARNINGS, AND TAXESJournal of Accounting Research, 33
Healy Healy, Wahlen Wahlen (1999)
A review of the earnings management literature and its implications for standard settingAccounting Horizons, 13
Robert Holthausen, Robert Verrecchia (1988)
THE EFFECT OF SEQUENTIAL INFORMATION RELEASES ON THE VARIANCE OF PRICE CHANGES IN AN INTERTEMPORAL MULTI-ASSET MARKETJournal of Accounting Research, 26
H. White (1980)
A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for HeteroskedasticityEconometrica, 48
Bartov Bartov (1993)
The timing of asset sales and earnings manipulationThe Accounting Review, 68
J. Jones (1991)
Earnings Management During Import Relief InvestigationsJournal of Accounting Research, 29
Aharony (2000)
Financial packaging of IPO firms in a traditional economy: The case of B-shares and H-shares in ChinaJournal of Accounting Research, 33
Utpal Bhattacharya, H. Daouk, Michael Welker (2002)
The World Price of Earnings OpacityEuropean Finance Association Meetings (EFA) (Archive)
Liberty Liberty, Zimmerman Zimmerman (1986)
Labor union contract negotiations and accounting choicesThe Accounting Review, 61
DeFond DeFond, Wong Wong, Li Li (1999)
The impact of improved auditor independence on audit market concentration in ChinaJournal of Accounting and Economics, 28
Kevin Chen, Hongqi Yuan (2004)
Earnings Management and Capital Resource Allocation: Evidence from China's Accounting‐Based Regulation of Rights IssuesThe Accounting Review, 79
Richard Sloan (1998)
Do Stock Prices Fully Reflect Information in Accruals and Cash Flows About Future EarningsThe Accounting Review, 71
Ball Ball, Kothari Kothari (1991)
Security returns around earnings announcementsThe Accounting Review, 66
Under the 1996‐98 security regulations in China, the accounting rate of return on equity (ROE) has to be greater than 10 percent for three "consecutive" years for a firm to qualify for stock rights offers. Despite declining economic conditions during this period, the percentage of firms reporting ROE between 10 and 11 percent is about "three" times that for 1994‐95. This unique regulatory environment provides a natural experimental setting for the empirical assessment of earnings‐management behavior and its consequences. This study examines whether listed Chinese firms manage earnings to meet regulatory benchmarks and whether regulators and investors consider the quality of earnings in their respective regulatory and investment decisions. On the basis of a sample of listed Chinese firms from 1996 to 1998, we observe that managers execute transactions involving below‐the‐line items and use income‐increasing accounting accruals to meet regulatory ROE targets for stock rights offerings. The firms that apply for, but fail to receive, regulatory approval manage earnings more significantly than do firms that receive approval and pair‐matched control firms. Our market study also suggests that investors differentiate the quality of earnings and put less value on earnings suspected of a greater degree of management. Overall, our results imply that the regulatory bodies and investors to some extent make rational adjustments for the quality of earnings.
Contemporary Accounting Research – Wiley
Published: Mar 1, 2005
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.