Detecting Earnings Management: A New Approach

By Patricia M. Dechow, Amy P. Hutton, J. H. Kim, Richard G. Sloan. 2012

658 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/3136974cd5d5ab46d6035eb35ca01af349d9e262

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Citations in the corpus

Capital Market Consequences of Audit Partner Quality (2015, neutral): “We do not use DA as the dependent variable without partitioning the variable into positive and negative values, because accrual based earnings management reverses over time (Dechow et al. 2012).”
Earnings quality: Evidence from the field (2013, methodology): “We develop the broad hypotheses and the specific questions of the initial survey instrument based on our review of the literature on earnings quality, including recent reviews in Dechow et al. (2010), Melumad and Nissim (2009), and Dechow and Schrand (2004). As discussed below, we supplement this re”
CEO Tenure and Earnings Management (2015, neutral): “…also predict that CEOs overstate earnings in their final year of service in order to boost their final year's pay; although, extant empirical evidence related to this prediction is mixed (see e.g., Dechow and Sloan, 1991; Pourciau, 1993; Murphy and Zimmerman, 1993; Cheng, 2004; Kalyta, 2009).”
How has the financial crisis affected earnings management? A European study (2015, methodology): “In the second one, we perform a Monte Carlo experiment to avoid biases due to the limited number of observations for certain countries and to the absence of nonrandom samples (Dechow et al., 2012).”
The Effect of Financial Constraints on Income Shifting by U.S. Multinationals (2016, methodology): “The adding-up constraint in our study is similar to the earnings management estimation technique developed by Dechow et al. (2012) which assumes an adding-up constraint in accruals over time.26 4.2.”
Post-listing performance and private sector regulation: The experience of London's Alternative Investment Market $ (2013, neutral): “Our results suggest that traditional exchanges are a better bet even for investors who prefer a small probability of a large payoff. record positive discretionary accruals at the IPO, and that there is a significantly larger accrual reversal subsequent to the IPO (Dechow et al., 2012).”
Accrual-based and real earnings management and political connections (2015, background): “…the earnings management literature indicates disagreements concerning the validity of these models, i.e., the models might be mis-specified due to correlated omitted variables and lack to isolate discretionary accruals and real activities manipulation (Dechow et al., 1995; Dechow et al., 2012).”
Corporate Governance and Earnings Management: A Survey of Literature (2013, methodology): “As Dechow et al. (2012) state, the explanation power of accrual-based models for earnings management is low, and because of omitted correlated variables for nondiscretionary accruals, the model test has many misspecification problems.”
Do practitioner assessments agree with academic proxies for audit quality? Evidence from PCAOB and internal inspections (2019, background): “Unsigned accruals are often used in absence of a particular directional prediction (Hribar and Nichols, 2007), and signed accruals when an incentive to manage earnings upwards exists (Dechow et al., 2012).”
Audit Committee Financial Expertise and Earnings Management: The Role of Status (2014, background): “Abnormal accruals are a common measure of within-GAAP earnings management (Zhao and Chen, 2008) and a potential indication of irregularities (Dechow et al., 2012).”
Readability of 10‐K Reports and Stock Price Crash Risk (2019, neutral): “…tests, we find that our results are qualitatively unchanged by using (i) the first difference of an earnings management measure that explicitly accounts for accrual reversals (Dechow et al. 2012) and (ii) the first difference of a meet or beat measure that does not rely on any accrual model.”