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Earnings Management Behaviour of Telecom India: A Review of MTNL and Bharti Airtel Ltd


  • Sandeep Goel

    () (Management Development Institute)


Earnings behaviour of the management is the key concern for every shareholder. This has assumed importance on account of increasing number of corporate frauds at the global level. It is identified by the level of accruals exercised by the management as it forms the basis of earnings management. Telecom sector being a part of service sector is more vulnerable to this discretionary earnings behaviour. Therefore, the present paper attempts to highlight earnings management behavior in Indian telecom sector on comparative basis of MTNL and Bharti Airtel. MTNL is a leading public sector company, whereas Airtel is a leading private sector company. They have been chosen to appreciate better the different earnings’ behavior in two diverse leading enterprises. Earnings management has been analyzed using five industry practices, viz. (i) quality of earnings, (ii) quality of revenue, (iii) volatility of income, (iv) discretionary accruals, and (v) manipulation score. It is hoped that the findings would make investors’ more aware about earnings management and help them analyze the reported numbers better.

Suggested Citation

  • Sandeep Goel, 2014. "Earnings Management Behaviour of Telecom India: A Review of MTNL and Bharti Airtel Ltd," Accounting and Finance, Institute of Accounting and Finance, issue 1, pages 71-77, March.
  • Handle: RePEc:iaf:journl:y:2014:i:1:p:71-77

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    References listed on IDEAS

    1. repec:bla:joares:v:29:y:1991:i:2:p:193-228 is not listed on IDEAS
    2. Burgstahler, David & Dichev, Ilia, 1997. "Earnings management to avoid earnings decreases and losses," Journal of Accounting and Economics, Elsevier, vol. 24(1), pages 99-126, December.
    3. Skinner, Douglas J., 1993. "The investment opportunity set and accounting procedure choice : Preliminary evidence," Journal of Accounting and Economics, Elsevier, vol. 16(4), pages 407-445, October.
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    More about this item


    earnings management; quality of earnings; quality of revenue; discretionary accruals; telecom sector;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill


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