Pre managed earnings benchmarks and earnings management of Australian firms
MetadataShow full item record
This study investigates benchmark beating behaviour and circumstances under which managers inflate earnings to beat earnings benchmarks. We show that two benchmarks, positive earnings and positive earnings change, are associated with earnings manipulation. Using a sample of Australian firms from 2000 to 2006, we find that when the underlying earnings are negative or below prior year’s earnings, firms are more likely to use discretionary accruals to inflate earnings to beat benchmarks.
This article is published under the Open Access publishing model and distributed under the terms of the Creative Commons Attribution License https://creativecommons.org/licenses/by/3.0/au/. Please refer to the licence to obtain terms for any further reuse or distribution of this work.
Showing items related by title, author, creator and subject.
Sun, Lan (2009)Earnings management is an area in which managers are able to exercise discretion over financial reporting to achieve various objectives. Researchers have been investigating the pervasiveness of earnings management and ...
Habib, A.; Hossain, Mahmud (2008)This paper examines whether managers manage earnings to ‘just meet or beat’ analyst forecasts in Australia. Previous Australian studies on benchmark-beating have focused on loss avoidance and small earnings increases as ...
Rusmin, Rusmin; Scully, Glennda; Tower, Greg (2013)figures. Using a sample of 1,094 transportation firm-year observations before and throughout the global financial crisis (GFC) period of 2006-2009 in seven Asian countries, the purpose of this study is to investigate ...