haku: @indexterm FINANCIAL ACCOUNTING / yhteensä: 306
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| Tekijä: | Kinnunen, J. Koskela, M. |
| Otsikko: | Who is miss world in cosmetic earnings management? A cross-national comparison of small upward rounding of net income numbers among eighteen countries |
| Lehti: | Journal of international accounting research
2003 : VOL. 2, p. 39-68 |
| Asiasana: | Auditing Financial accounting Companies Culture International |
| Kieli: | eng |
| Tiivistelmä: | Using a sample of appr. 87.000 earnings observations from almost 22.000 firms in 18 countries for the 5-year period 1995-1999, this paper documents firms' tendency to exercise cosmetic earnings management (or CEM) worldwide. Following prior studies in the area (Thomas 1989, among others), CEM is defined by small upward rounding of reported net income that generates more than expected zeros and less than expected nines as second digit of earnings numbers. This study's sample is partitioned into positive and negative earnings to see whether the anomalous frequencies are reversed in negative earnings (or losses) relative to positive earnings (or profits), as predicted by CEM. In addition, net sales is analyzed as control variable. It is found that, due to more ample opportunities to accounting manipulation, upward rounding is much more significant on the bottom line than on the top of an income statement. Consistent with prior studies, a reversed pattern of CEM for net losses is found in the study. In addition, there is found evidence for the study's expectation that CEM covaries with some institutional factors. |
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