Business Commons^™

Ceo Network Centrality And Earnings Management, Huan Qiu

Doctoral Dissertations

This study investigates the relationship between CEO network centrality, choice of earnings management, and the consequences for the period from 1998 to 2016. From our empirical analysis, we find that CEOs with higher network centrality are more likely to use accruals-based earnings management, but less likely to use real earnings management to manage earnings upward in the current year. Although the use of accruals-based earnings management normally results in bad economic consequences for firms, CEO network centrality is associated with better (at least not worse) earnings quality, after controlling the use of accruals-based earnings management. As for longterm economic performance, …

The Effect Of Creative Culture On Aggressive Financial Reporting, Ryan Guggenmos

Doctoral Dissertations

Chief Executive Officers identify creativity as the leadership competency most desired in business today (IBM 2010). As companies recognize the benefits of creativity and innovation, managers are increasingly looking to build creative cultures within their organizations. However, research in psychology suggests that there may be unintended negative consequences to these attempts. In this study, I predict and find that innovative company culture primes creative thought and, in turn, leads to higher levels of real earnings management (REM) behaviors. Using construal level theories of psychological distance proposed by Trope and Liberman (2010), I design and test both a lower-level and a …

Clawback Provisions: How Sharp Are The Claws? An Analysis Of The Deterrence Effectiveness Of Voluntary Clawback Provisions, Allison Kristina Beck

Doctoral Dissertations

This paper investigates the effectiveness of voluntary clawback provisions as a deterrent for earnings management behavior. The Dodd-Frank (DF) Bill signed into law July 21, 2010 mandates that the SEC adopt a rule requiring all U.S.-listed companies to implement clawback provisions that recapture excess compensation received by executives on the basis of a faulty financial statement filing with the SEC that later must be restated. Implicitly, the DF regulation assumes that clawbacks will successfully constrain financial misreporting and that a “one-size-fits-all” approach is best. In contrast with prior research that has investigated factors associated with a firm’s decision to adopt …

Earnings Management Around Mergers And Acquisitions, Eugenie Ann Ardoin Goodwin

Doctoral Dissertations

Earnings management has become a topic of interest when trying to explain anomalies in company stock performance following corporate events such as equity offerings and mergers. If managers are trying to manipulate earnings upward to increase stock value before a merger to achieve a better exchange ratio at acquisition announcement, they may use discretion in accruals to inflate earnings and/or reduce spending in research and development prior to the announcement. Literature results are mixed as to whether firms engage in opportunistic earnings management using discretionary accruals before acquisition announcement and if this manipulation has an impact on stock performance post-announcement. …

Earnings Management Around Secondary Equity Offerings By Insiders, Hui Di

Doctoral Dissertations

Accruals-based earnings management is becoming a more common practice. Firms have strong incentives to manage earnings around secondary equity offerings by insiders (insider offerings) to raise offer prices. However, the literature on earnings management around insider offerings is limited and provides mixed evidence of earnings management. In this study, I investigate the motivations and the extent of earnings management around insider offerings.

This study examines a sample of 490 secondary equity offerings made by insiders over the period 1989 to 2005. Inconsistent with the managerial opportunism hypothesis, I find negative adjusted discretionary total accruals before insider offerings. While discretionary accruals …