Evidence on the Trade-Off between Real Activities Manipulation and Accrual-Based Earnings Management

By Amy Y. Zang. 2012

2,050 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/ca625ab160c5940664f632844334e833a2babdb0

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Economics and Econometrics

In Strategy and Management

Citations in the corpus

The Real Effects of Mandatory Quarterly Reporting (2017, methodology): “We match firms in the same industry according to the following set of characteristics using a firm-level propensity score matching approach: (i) To capture firm-level drivers of RAM (Roychowdhury 2006; Zang 2012), we include firm size (Size), growth expectations of market participants measured by th”
The Real and Accrual-based Earnings Management Behaviors: Evidence from the Split Share Structure Reform in China (2014, background): “/ T he Inteational Jornal of A ccnting xx (214) xx–xxx P lase ite his aticle s: K o, .-M ., et l., T he R al nd A ccrl-based E arings M aagem nt B ehiors: E vidce..,T he InternatlJournalofA ccnting (2014),http://dx.”
Abnormal real operations, real earnings management, and subsequent crashes in stock prices (2014, positive): “…information, a manager can only implement the former during an accounting period, whereas the latter can be performed at the end of the period (Zang 2012).24 Considering this timing difference between DRO and DA, we classify crashes into two types: those that happen in the earnings…”
CEO Tenure and Earnings Management (2015, positive): “The control variables in this model are based on prior studies (e.g., Roychowdhury, 2006; Cohen and Zarowin, 2010; Zang, 2012; Cheng et al., 2012; 7 We repeat our analyses after replacing discretionary total accruals with discretionary working capital accruals, as defined in Allen et al. (2012).”
The impact of SME’s pre-bankruptcy financial distress on earnings management tools (2015, background): “…there is a large volume of studies devoted to documenting accrual earnings management (e.g. Nelson, Elliot, & Tarpley, 2002; Teoh, Welch, & Wong, 1998) while real actions undertaken to manage earnings have received less attention by the accounting literature (Xu, Taylor, & Dugan, 2007; Zang, 2012).”
Conditional conservatism and the limits to earnings management (2020, positive): “First, we use the recursive equation system in Zang (2012), introducing conservatism as an additional firm characteristic that affects the decision to use accrualsbased vs real earnings management.”
Do Analysts Matter for Governance? Evidence from Natural Experiments (2015, methodology): “…Jones model Calculated using abnormal level of production costs and abnormal level of discretionary expenditures, estimated cross-sectionally following Roychowdhury (2006) and Zang (2012) Market-to-book ratio (Fiscal-year-end market value of equity + book value of liabilities)/total assets.”
Audit Quality and the Trade-Off between Accretive Stock Repurchases and Accrual-Based Earnings Management (2012, methodology): “Conversely, using earnings benchmarks, Zang (2012) fails to document a positive association between Big N auditors and real earnings management.”
The effect of accounting comparability on the accrual-based and real earnings management (2016, background): “For example, Zang (2012) investigates the substitution between AEM and REM and reports that AEM (REM) decreases (increases) when the cost of AEM is higher (e.g., high audit quality) and REM (AEM) decreases (increases) when the cost of REM is higher (e.g., high tax rate).”
Corporate governance and earnings management in concentrated markets (2020, methodology): “, when the firm has low competitive power or is financially unstable (Zang 2012).”
Mandatory IFRS adoption: the trade-off between accrual-based and real earnings management (2017, methodology): “Following Cohen and Zarowin (2010) and Zang (2012), to capture the total effects of real earnings management, we combine the three individual measures – REAL_CFO, REAL_PROD, and REAL_DISCX – to compute two comprehensive metrics of real earnings management activities.”
The impact of corporate governance mechanisms on real and accrual earnings management practices: evidence from Jordan (2019, background): “Institutional investor ownership reduces REM through sales manipulation and through discretionary expenditures; this finding is consistent with previous REM studies, including Roychowdhury (2006) and Zang (2012) and the ABDACC finding is also consistent with other AEM studies.”