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dc.contributor.authorYu, Weien_US
dc.date.accessioned2008-09-17T19:29:49Z
dc.date.available2008-09-17T19:29:49Z
dc.date.issued2008-06-24en_US
dc.identifier.urihttp://hdl.handle.net/1853/24686
dc.description.abstractIn the first essay, I examine the association between auditor industry specialization and earnings management choices. Prior research suggests that industry specialist auditors constrain accounting-based earnings management. But such actions may cause client companies to seek alternative means to manage earnings. Specifically, companies that hire industry specialist auditors may alter operating decisions to meet earnings targets, referred to as real activities manipulation. This essay investigates whether clients of industry specialist auditors that have an incentive to manage earnings are constrained from managing earnings through accruals manipulation and, therefore, are more likely to engage in real activities manipulation. Further, I examine whether operating performance declines for firms suspected of real activities manipulation. My findings indicate that clients of industry specialist auditors with incentives to manage earnings have lower absolute value of accruals relative to firms with incentives to manage earnings that do not hire industry specialist auditors. These clients of industry specialist auditors are also more likely to engage in real activities manipulation, suggesting this is a possible unintended consequence of hiring an industry specialist auditor. I also document evidence that firms suspected of real activities manipulation have lower future operating performance relative to firms not suspected of real activities manipulation. In the second essay, I examine the association between the tightness of accounting standards and earnings management choices. Prior studies suggest that managers switch from accounting-based earnings management to real activities manipulation in response to tightening accounting standards. My study investigates this line of reasoning. I develop an analytical model and conduct an experimental examination of the effect of flexibility of accounting standards under different institutional environments. I find that managers switch from accounting-based earnings management to real activities manipulation with tightening accounting standards only when the institutional investors have a short-term investment horizon. In contrast, when managers are monitored by institutional investors with a long-term investment horizon, they do not engage in such behavior.en_US
dc.publisherGeorgia Institute of Technologyen_US
dc.subjectInstitutional investorsen_US
dc.subjectAccounting standardsen_US
dc.subjectAccounting-based earnings managementen_US
dc.subjectReal activities manipulationen_US
dc.subjectAuditor industry specializationen_US
dc.subject.lcshEarnings management
dc.subject.lcshAuditors
dc.subject.lcshAccounting
dc.titleAccounting-based earnings management and real activities manipulationen_US
dc.typeDissertationen_US
dc.description.degreePh.D.en_US
dc.contributor.departmentManagementen_US
dc.description.advisorCommittee Chair: Church, Bryan; Committee Member: Comiskey, Eugene; Committee Member: Haizheng, Li; Committee Member: Kuang, Xi; Committee Member: Schneider, Arnolden_US


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