Testing Earning Management
AbstractEarnings management to avoid earnings decreases and losses implies that the time series properties of the last quarter in the fiscal year differ from those of the other three quarters. We propose a simple parametric methodology to diagnose such differences. Application to a random sample of 390 firms in the Compustat database gives strong evidence of earnings management.
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Bibliographic InfoPaper provided by Erasmus University Rotterdam, Econometric Institute in its series Econometric Institute Report with number EI 2009-31.
Date of creation: 26 Nov 2009
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earnings management; periodic time series models;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-17 (All new papers)
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