Where do firms manage earnings?
By Scott D. Dyreng, Michelle Hanlon, Edward L. Maydew. Review of accounting studies, 2012
122 citations recorded by the source corpus.
Despite decades of research on how, why, and when companies manage earnings, there is a paucity of evidence about the geographic location of earnings management within multinational firms. In this study, we examine where companies manage earnings using a sample of 2,067 U.S. multinational firms from 1994 to 2009. We predict and find that firms with extensive foreign operations in weak rule of law countries have more foreign earnings management than companies with subsidiaries in locations where the rule of law is strong. We also find some evidence that profitable firms with extensive tax haven subsidiaries manage earnings more than other firms and that the earnings management is concentrated in foreign income. Apart from these results, we find that most earnings management takes place in domestic income, not foreign income.
View Paper: https://www.semanticscholar.org/paper/491abeade7abb53bcc833f660107037abc49689f
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
- Kevin S. Markle
- Scott D. Dyreng
- C. Beuselinck
- Stefano Cascino
- A. Vanstraelen
- M. Deloof
- Roman Lanis
- Michelle Hanlon
Citations in the corpus
- Firm Internationalization and Corporate Social Responsibility (2014, unknown): “For each institutional variable, we follow Dyreng et al. (2012) and compute the weighted average institutional rating of countries in which the firm discloses subsidiaries.”
- The Effect of Tax Authority Monitoring and Enforcement on Financial Reporting Quality (2014, unknown): “For example, Dyreng, Hanlon, and Maydew (2012) find that firms are more likely to manage their foreign (pre-tax and after-tax) earnings when their subsidiaries are located in tax havens.”
- The Effect of Financial Constraints on Income Shifting by U.S. Multinationals (2016, background): “27 Examples in accounting research include Collins and Kothari (1989), Khan and Watts (2009), Dyreng et al. (2012), and Dyreng and Lindsey (2009), among others. preprint accepted manuscript 25”
- Earnings Management within Multinational Corporations (2018, background): “domestic and foreign earnings (Thomas, 1999; Fan, 2012; Hope et al., 2008; Dyreng et al., 2012; Durnev et al., 2014).”