Stock market listing status and real earnings management

Research output: Contribution to journalArticleScientificpeer-review

6 Citations (Scopus)

Abstract

This study analyzes real earnings management among privately held versus publicly listed firms. Our first finding is that public firms engage in more earnings management through operating activities. When a clear incentive to manage earnings in a specific direction is present we continue to find that public firms manage their earnings more than private firms. We reason that capital market pressure and ownership characteristics drive our results. Additional analyses reveal that public firms employ more real earnings management as a proportion of the total earnings management strategy. Furthermore, we find that mitigating factors of real earnings management have stronger impact in public firms. This study contributes to literature on non-accrual earnings management and to the broader understanding about the private vis-à-vis public firm reporting and operating behavior. Finally, we contribute by identifying an important societal cost of stock market listing, which is the increase in potentially value-destroying real earnings management.
Original languageEnglish
Peer-reviewed scientific journalJournal of Accounting and Public Policy
Volume37
Issue number5
Pages (from-to)420-435
Number of pages16
ISSN0278-4254
DOIs
Publication statusPublished - 15.10.2018
MoE publication typeA1 Journal article - refereed

Keywords

  • 512 Business and Management
  • Listing status
  • Earnings management
  • Opportunistic behavior
  • Private firms
  • Public versus private
  • Real earnings management

Fingerprint Dive into the research topics of 'Stock market listing status and real earnings management'. Together they form a unique fingerprint.

  • Activities

    • 4 Organisation of / participation in conferences, workshops, courses, seminars
    • 2 Visit to other institution

    2016 Annual Meeting of the Eastern Finance Association

    Jesper Per Alexander Haga (Speaker: Presenter)

    06.04.201609.04.2016

    Activity: Participating in or organising an eventOrganisation of / participation in conferences, workshops, courses, seminars

    2016 Annual Meeting of the American Accounting Association (AAA)

    Dennis Sundvik (Speaker: Presenter)

    08.08.201610.08.2016

    Activity: Participating in or organising an eventOrganisation of / participation in conferences, workshops, courses, seminars

    NHH - Norwegian School of Economics

    Jesper Per Alexander Haga (Visit abroad)

    09.06.201612.06.2016

    Activity: Visiting an external institutionVisit to other institution

    Cite this