“Whoa! It’s like Spotify but for academic articles.”

Instant Access to Thousands of Journals for just $40/month

Try 2 weeks free now

The use of advertising activities to meet earnings benchmarks: evidence from monthly data



Using a unique database of monthly media advertising spending, we examine whether managers engage in real earnings management to meet quarterly financial reporting benchmarks. We extend prior literature by (1) separately analyzing advertising activities, allowing us to explore the possibility that managers could reduce or boost advertising to meet benchmarks; (2) analyzing actual activities as opposed to inferring them from reported expenses, which are also subject to accrual choices; (3) investigating the timing, within a quarter, of altered advertising spending; and (4) examining quarterly earnings benchmarks. We find that managers, on average, reduce advertising spending to avoid losses and earnings decreases. However, we also report that firms in the late stages of their life cycle increase advertising to meet earnings benchmarks. Finally, we find some evidence that firms increase advertising in the third month of a fiscal quarter and in the fourth quarter to beat prior year’s earnings.



Review of Accounting StudiesSpringer Journals

Published: Dec 1, 2010

DOI: 10.1007/s11142-009-9105-8

Free Preview of First Page

Loading next page...

You’re reading a free preview. Subscribe to read the entire article.

DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy unlimited access and
personalized recommendations from
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $40/month

Try 2 weeks free now

Explore the DeepDyve Library

How DeepDyve Works

Spend time researching, not time worrying you’re buying articles that might not be useful.

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from Springer, Elsevier, Nature, IEEE, Wiley-Blackwell and more.

All the latest content is available, no embargo periods.

See the journals in your area

Simple and Affordable Pricing

14-day free trial. Cancel anytime, with a 30-day money-back guarantee.

Monthly Plan

  • Read unlimited articles
  • Personalized recommendations
  • Print 20 pages per month
  • 20% off on PDF purchases
  • Organize your research
  • Get updates on your journals and topic searches


Best Deal — 25% off

Annual Plan

  • All the features of the Professional Plan, but for 25% off!
  • For the normal price of 10 articles elsewhere, you get one full year of unlimited access to articles.

billed annually