An alternative interpretation of the discontinuity in earnings distributions

By W. H. Beaver, Maureen F. McNichols, Karen K. Nelson. 2007

232 citations recorded by the source corpus.

Subfields: Accounting, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/b5496e9fee1432eec79f05683cab7c4aadc45286

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Citations in the corpus

Discretionary Accruals and Earnings Management: An Analysis of Pseudo Earnings Targets (2006, unknown): “In contrast, Beaver et al. (2003) contend that much of the kink in the earnings and earnings changes distributions are attributable to factors not related to earnings management, such as the asymmetric treatment of income taxes and special items for loss firms versus profitable firms.”
Corporate-sponsored foundations and earnings management (2006, methodology): “Beaver, McNichols, and Nelson (2003b) examine discretionary loss reserve accruals for insurers around a benchmark of zero earnings.”
Audit Quality and the Trade-Off between Accretive Stock Repurchases and Accrual-Based Earnings Management (2012, background): “In contrast, Beaver et al. (2007) argues that the asymmetric nature of income taxes and 2 Managerial choices between accrual-based and real earnings management is not assumed to be an ‘‘either/or’’ decision.”
Earnings quality: Evidence from the field (2013, background): “, 1996; Durtschi and Easton, 2005); or (ii) some unobservable dimension of earnings quality related to the unobservable fundamental earnings process (Beaver et al., 2007; Dechow et al., 2010).”
The effect of audit adjustments on earnings quality: Evidence from China (2016, background): “Beaver et al. (2007) argue that the discontinuity is partly explained by the asymmetric tax treatments of profits and losses.”
Understanding Earnings Quality: A Review of the Proxies, Their Determinants and Their Consequences (2010, background): “…more direct evidence including Dechow et al. (2003), who show that discretionary accruals are no different for small profit versus small loss firms; Beaver et al. (2007), who suggest that the ‘‘kink’’ in earnings around zero can be explained by asymmetric taxes, rather than opportunistic choices;…”
Earnings management and accounting income aggregation (2007, unknown): “Beaver et al. (2003a) investigate whether the asymmetric tax treatment of positive and negative earnings and special items could be responsible for the observed discontinuity at zero in the distribution of earnings and earnings changes.”