Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Accounting
The Influence Of Foreign Operations And Their Disclosure On Earnings Quality, Sixian Yang, Fang Hu, Don Giacomino
The Influence Of Foreign Operations And Their Disclosure On Earnings Quality, Sixian Yang, Fang Hu, Don Giacomino
Accounting Faculty Research and Publications
This paper investigates the influence of foreign operations and their financial disclosure on earnings quality in terms of accounting conservatism (timely recognizing losses). In a large (7,311 corporate years) sample of U.S. corporations, we find earnings of firms with multinational operations (MNCs) tend to be of lower quality and are reported less conservatively than those without foreign operations (domestic firms). Further, by looking at the geographic segment information disclosed by MNCs, we find that earnings conservatism gets improved if a MNC reports “clean” segment information of foreign operations; wherein operating results of MNC are broken down by geographic regions (continent …