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Earnings management in domestic versus multinational firms: discussion of “Where do firms manage earnings?”

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  • Annalisa Prencipe

    (Università Bocconi)

Abstract

Dyreng, Hanlon, and Maydew examine the geographical location of earnings management within US multinational firms. The paper addresses an interesting topic and partially fills a gap in the literature. This discussion presents additional empirical evidence on issues related to the research question raised by Dyreng et al. In particular, the discussion provides answers to the following preliminary questions: do US multinational firms manage earnings differently from domestic firms? If so, to what extent are they different? Surprisingly, these issues have been overlooked by prior studies. Indeed, the results below show that US multinational firms manage earnings less than domestic companies. The discussion also raises a number of additional questions on earnings management in multinational firms and calls for further research on the topic.

Suggested Citation

  • Annalisa Prencipe, 2012. "Earnings management in domestic versus multinational firms: discussion of “Where do firms manage earnings?”," Review of Accounting Studies, Springer, vol. 17(3), pages 688-699, September.
    • Handle: RePEc:spr:reaccs:v:17:y:2012:i:3:d:10.1007_s11142-012-9200-0
    DOI: 10.1007/s11142-012-9200-0
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    References listed on IDEAS

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    1. Leuz, Christian & Nanda, Dhananjay & Wysocki, Peter D., 2003. "Earnings management and investor protection: an international comparison," Journal of Financial Economics, Elsevier, vol. 69(3), pages 505-527, September.
    2. Ball, Ray & Kothari, S. P. & Robin, Ashok, 2000. "The effect of international institutional factors on properties of accounting earnings," Journal of Accounting and Economics, Elsevier, vol. 29(1), pages 1-51, February.
    3. Bushman, Robert M. & Piotroski, Joseph D., 2006. "Financial reporting incentives for conservative accounting: The influence of legal and political institutions," Journal of Accounting and Economics, Elsevier, vol. 42(1-2), pages 107-148, October.
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    Cited by:

    1. Yan-Jie Yang & Yunsheng Hsu & Qian Long Kweh & Jawad Asif, 2025. "Accrual vs. Real Earnings Management in Internationally Diversified Firms: The Role of Institutional Supervision," JRFM, MDPI, vol. 18(7), pages 1-21, July.

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    Keywords

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    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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