The Effect of Earnings Management on the Value Relevance of Accounting Information
AbstractThis study investigates whether opportunistic earnings management affects the value relevance of net income and book value in determining stock price. We document a decrease in the value relevance of earnings in the year of an equity offering for a group of firms with ex post evidence of earnings management. This decrease is greater for the discretionary component of earnings than for the non-discretionary component. These results are robust to model specification and the type of offering. However, the results are sensitive to firms' disclosure activity prior to the offering. Copyright Blackwell Publishers Ltd, 2004.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Business Finance & Accounting.
Volume (Year): 31 (2004-04)
Issue (Month): 3-4 ()
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0306-686X
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- Jamal Barzegari Khanagha, 2011. "Value Relevance of Accounting Information in the United Arab Emirates," International Journal of Economics and Financial Issues, Econjournals, vol. 1(2), pages 33-45, June.
- John M. Barrios & Marco Fasan & Daniele Macciocchi, 2013. "CEO turnover, earnings management and value relevance. A theoretical analysis on the Italian context," Working Papers 11, Department of Management, Università Ca' Foscari Venezia.
- Tang, Tanya & Firth, Michael, 2011. "Can book-tax differences capture earnings management and tax Management? Empirical evidence from China," The International Journal of Accounting, Elsevier, vol. 46(2), pages 175-204, June.
- Chen, Ching-Lung & Lu, Ming-Che & Yen, Gili, 2012. "Dilution/incentive effects associating with employee bonuses in Taiwan: Empirical findings under two regimes," International Review of Economics & Finance, Elsevier, vol. 22(1), pages 267-283.
- Hany Kamel & Said Elbanna, 2010. "Assessing the perceptions of the quality of reported earnings in Egypt," Managerial Auditing Journal, Emerald Group Publishing, vol. 25(1), pages 32-52, January.
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