Earnings management: a perspective

Compares three definitions of earnings management used by accounting researchers and three methods of estimating it: aggregate accruals, specific accruals and discontinuities in earnings distribution. Discusses evidence relating to the reasons for income-increasing earnings management, income-decrea...

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Bibliographic Details
Published in:Managerial finance 2001, Vol.27 (12), p.3-17
Main Author: Beneish, Messod D
Format: Article
Language:English
Subjects:
Accounting policies
Accounting research
Corporate finance
Creative accounting
Earnings
Earnings management
Financial reporting
Fraud
Incentives
Income
Investigations
Investors
Islam
Motivation
Operating leases
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Summary:Compares three definitions of earnings management used by accounting researchers and three methods of estimating it: aggregate accruals, specific accruals and discontinuities in earnings distribution. Discusses evidence relating to the reasons for income-increasing earnings management, income-decreasing earnings management and specific contexts, e.g. financial institutions with regulatory constraints. Concludes that, although the evidence is limited, managers are more likely to manipulate income up rather than down; and identifies some opportunities for further research.
ISSN:0307-4358
1758-7743
DOI:10.1108/03074350110767411