Shareholder Activism and Earnings Management Incentives

2012 ◽  
Author(s):  
Yan Sun ◽  
Weimin Wang ◽  
Frank Wang ◽  
Sanjian Bill Zhang
Keyword(s):  
Earnings Management ◽  
Shareholder Activism ◽  
Management Incentives

scholarly journals Earnings Management through Tax Reserves and Auditor-Provided Tax Services

2017 ◽  
Vol 6 (4) ◽  
pp. 217
Author(s):  
Chunlai Ye
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Income Smoothing ◽  
Earnings Forecast ◽  
Large Firms ◽  
Fin 48 ◽  
Management Incentives ◽  
Consensus Forecasts ◽  
Earnings Smoothing ◽  
Tax Reserves

This study investigates whether firms continue to use tax reserves to achieve financial reporting objectives in the post-FIN 48 period and the effect of auditor-provided tax services on earnings management through tax reserves. Three types of earnings management incentives are considered in this study: meeting or beating the consensus forecasts, income smoothing, and taking an “earnings bath.” The analyses yield evidence that only non-large firms manipulate tax reserves to meet/beat earnings forecast in the post-FIN 48 period; however, tax reserves are still utilized by both large and non-large firms to smooth earnings. Moreover, evidence is provided that the auditor who provides more tax services facilitates large firms’ earnings smoothing in the post-FIN 48 period, implying independence impairment. But this behavior does not exist within non-large firms, arguably because the auditor does not compromise independence for less important clients.

Shareholder Activism, Dividend Policy, and Earnings Management: Evidence from Korea

2021 ◽  
Vol 46 (3) ◽  
pp. 43-88
Author(s):  
Yoona Lee ◽  
Tae-Dong Kim ◽  
Chang-Hyun Bae
Keyword(s):  
Earnings Management ◽  
Dividend Policy ◽  
Shareholder Activism

scholarly journals A Study on the Relationship between Earnings Management Incentives and Earnings Response Coefficient

2016 ◽  
Vol 36 ◽  
pp. 232-243
Author(s):  
Mohsen Hosseini ◽  
Kamal Nadafi Chalestori ◽  
Saeid Rezahi Hi ◽  
Ehsan Ebrahimi
Keyword(s):  
Earnings Management ◽  
Earnings Response Coefficient ◽  
Management Incentives ◽  
Response Coefficient ◽  
Earnings Response ◽  
The Relationship

The Impact on Auditor Judgments of CEO Influence on Audit Committee Independence

2011 ◽  
Vol 30 (4) ◽  
pp. 129-147 ◽  
Author(s):  
Jeffrey R. Cohen ◽  
Lisa Milici Gaynor ◽  
Ganesh Krishnamoorthy ◽  
Arnold M. Wright
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Committee ◽  
Data Availability ◽  
Audit Committees ◽  
Undue Influence ◽  
Management Incentives ◽  
Auditor Judgments ◽  
The Impact ◽  
Selection Of

SUMMARY Despite the importance of audit committee independence in ensuring the integrity of the financial reporting process, recent research suggests that even when audit committees meet regulatory independence requirements, certain factors, such as undue influence by the CEO over the selection of the audit committee, may diminish the ability of its members to be substantively independent. This study investigates whether auditors consider CEO influence over audit committee independence when making audit judgments where management's incentives to manage earnings differ. In an experiment, we find that audit partners and managers waive a larger amount of a proposed audit adjustment when management's incentives for earnings management are low than when incentives are high. However, when management incentives are high, auditors are less likely to waive as much of an adjustment when the CEO has less influence over the audit committee's independence than when the CEO's influence is greater. In all, the results support our expectations that auditors consider CEO influence on audit committee independence in the resolution of contentious accounting issues. Data Availability: Contact the authors.

Tax-Induced Earnings Management in Emerging Markets: Evidence from China

2012 ◽  
Vol 34 (2) ◽  
pp. 19-44 ◽  
Author(s):  
Bingxuan Lin ◽  
Rui Lu ◽  
Ting Zhang
Keyword(s):  
Earnings Management ◽  
Internal Control ◽  
Income Tax ◽  
Audit Committee ◽  
Data Availability ◽  
Marginal Tax Rate ◽  
Tax Rate ◽  
Management Incentives ◽  
Author Contact ◽  
Income Tax Law

ABSTRACT China issued the New Enterprise Income Tax Law in 2007, which changed the corporate income tax rate from 33 percent to 25 percent and came into effect in 2008. Using the simulated marginal tax rate as an indicator of firms' earnings management incentives, and discretionary current accruals as a proxy for earnings management, we find significant tax-induced earnings management in 2007. However, the downward earnings management becomes less obvious for firms that have a greater percentage of shares owned by state-owned enterprises, have an audit committee on the board, and disclose certified internal control reports. Data Availability: All data are available from the second author (contact author) upon request.

Institutional investors, shareholder activism, and earnings management

2011 ◽  
Vol 64 (12) ◽  
pp. 1352-1360 ◽  
Author(s):  
Michael Hadani ◽  
Maria Goranova ◽  
Raihan Khan
Keyword(s):  
Earnings Management ◽  
Institutional Investors ◽  
Shareholder Activism
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