Open Access. Powered by Scholars. Published by Universities.®
- Publication
- Publication Type
Articles 1 - 3 of 3
Full-Text Articles in Business
Conflict Or Alignment? The Role Of Return-Oriented Foreign Shareholders And Domestic Relational Shareholders In Mitigating Earnings Management, Toru Yoshikawa, Ignacio P. Requejo, Asli Colpan, Daisuke Uchida
Conflict Or Alignment? The Role Of Return-Oriented Foreign Shareholders And Domestic Relational Shareholders In Mitigating Earnings Management, Toru Yoshikawa, Ignacio P. Requejo, Asli Colpan, Daisuke Uchida
Research Collection Lee Kong Chian School Of Business
This study investigates the effects of foreign return-oriented shareholders and domestic relational shareholders of Japanese companies on the earnings management behavior of their invested firms when stock option pay is adopted. We theorize that foreign shareholders seek short-term returns and do not engage in close monitoring due to an information disadvantage while domestic shareholders prevent managerial behavior that distorts information disclosure. Our findings show that managers of firms that use stock option pay engage in earnings management to increase their private financial benefits and meet capital markets’ expectations, which allows them to enhance their own reputation. However, this managerial behavior …
Audit Adjustments And The Discontinuity In Earnings Distribution Around Zero, Chu Yeong Lim, Themin Suwardy, Tracey Chunqi Zhang
Audit Adjustments And The Discontinuity In Earnings Distribution Around Zero, Chu Yeong Lim, Themin Suwardy, Tracey Chunqi Zhang
Research Collection School Of Accountancy
Accounting researchers have documented that a discontinuity exists in earnings distribution around zero. However, there is considerable debate among researchers whether the earnings discontinuity around zero is caused by earnings management. We aim to shed light on the earnings discontinuity debate by examining the impact of audit adjustments on the distribution of earnings using a unique dataset from Singapore containing both recorded and waived adjustments. We find that audit adjustments do not reduce the discontinuity of earnings distribution around zero. This affirms that the results of Lennox et. al (2016) based on pre-tax earnings also apply to post-tax earnings and …
Moving Towards Principles-Based Accounting Standards: The Impact Of The New Revenue Standard On The Quality Of Accrual Accounting, He, Huiyu
Dissertations and Theses Collection (Open Access)
The new revenue standard (ASU 2014-09, codified in ASC 606 and ASC 340-40) establishes a comprehensive framework on accounting for contracts with customers and replaces most existing revenue recognition rules. The new guidance removes the inconsistencies and weaknesses of legacy guidance, while is more principles-based and requires more managerial judgements. Using as-reported data from structured filings to construct aggregate accruals that are potentially affected by the new revenue standard (i.e., sales-related accruals), I find that the new revenue standard increases the quality of sales-related accruals, as measured by future cash flow predictability. The increased cash flow predictability comes not only …