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New Evidence On The Substitution Between Accrual Earnings Management And Real Earnings Management In United States Firms

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Listed:
  • Stephanie Monteiro Miller
  • Aamer Sheikh

Abstract

This paper provides new evidence on the relation between accumulated accrual earnings management (AEM) and current real earnings management (REM) using new, more intuitive measures. It also investigates the time-series properties of REM and constructs a meaningful measure of accumulated REM to explore the relation between accumulated REM and current AEM. The results show that REM, like AEM, tends to reverse over time, and that while constraints on the ability to use AEM are associated with a shift toward REM, constraints on the ability to use REM are not associated with a shift toward AEM.

Suggested Citation

  • Stephanie Monteiro Miller & Aamer Sheikh, 2023. "New Evidence On The Substitution Between Accrual Earnings Management And Real Earnings Management In United States Firms," Accounting & Taxation, The Institute for Business and Finance Research, vol. 15(2), pages 1-14.
    • Handle: RePEc:ibf:acttax:v:15:y:2023:i:1:p:1-14
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    References listed on IDEAS

    as
    1. Patricia M. Dechow & Amy P. Hutton & Jung Hoon Kim & Richard G. Sloan, 2012. "Detecting Earnings Management: A New Approach," Journal of Accounting Research, Wiley Blackwell, vol. 50(2), pages 275-334, May.
    2. Cohen, Daniel A. & Zarowin, Paul, 2010. "Accrual-based and real earnings management activities around seasoned equity offerings," Journal of Accounting and Economics, Elsevier, vol. 50(1), pages 2-19, May.
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    More about this item

    Keywords

    Earnings Management; Discretionary Accruals; Real Earnings Management;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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