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Earnings Management around Research and Development Manipulation

Listed author(s):
  • Rihab Guidara

    ()

  • Younes Boujelbene

The aim of this paper is to investigate the impact of research and development investment (R&D) on managers’ behaviour. Specifically, considering that R&D is a specific investment, inherently exposed to a high level of uncertainty and high information asymmetry and that R&D accounting choices are a controversial issue, the current study tries to evaluate R&D effect on earnings management. The study is conducted on a sample of French companies investing heavily in R&D and accounting data are collected from the Worldscope database. The earning management is estimated through the discretionary accruals. Results indicate that R&D favours both incentive and ability for managers’ earnings management.

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Article provided by Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences in its journal International Journal of Academic Research in Accounting, Finance and Management Sciences.

Volume (Year): 4 (2014)
Issue (Month): 2 (April)
Pages: 26-37

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Handle: RePEc:hur:ijaraf:v:4:y:2014:i:2:p:26-37
Contact details of provider: Web page: http://hrmars.com/index.php/pages/detail/Accounting-Finance-Journal

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