Earnings Management Through Real Activities Manipulation

By S. Roychowdhury. 2006

5,032 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/cabd9cb3cdce2054948d578a6e2522f80071424e

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Citations in the corpus

Accrual-Based and Real Earnings Management: An International Comparison for Investor Protection (2015, positive): “Recent studies have examined REM as an important topic in research on earnings management (e.g., Roychowdhury, 2006).”
The effects of financial reporting and disclosure on corporate investment: A review (2019, methodology): “Roychowdhury (2006) introduced models for estimating “normal” production levels R&D and SG&A, with the residuals from these models yielding estimates of real earnings management.”
The impact of audit quality on real and accrual earnings management around IPOs (2017, methodology): “7 Since the development of Roychowdhury’s (2006) model to estimate sales-based manipulation (abnormal cash flows from operations), a large number of studies have examined sales-based manipulation in many different settings. However, none of these studies has attempted to explore whether this abnorma”
Audit Quality and the Trade-Off between Accretive Stock Repurchases and Accrual-Based Earnings Management (2012, background): “5 Skinner (2008) provides examples of competing motivations, including the signaling of future prospects, the issuing of stock options, and using stock swaps as part of merger and acquisition activities.”
Corporate Social Responsibility as a Strategic Shield Against Costs of Earnings Management Practices (2014, background): “Our results showing that EM practices have a negative effect on corporate reputation are consistent with previous evidence by Fombrun et al. (2000) and Roychowdhury (2006) among others.”
The impact of SME’s pre-bankruptcy financial distress on earnings management tools (2015, background): “…cutting advertising expenditures (Cohen, Mashruwala, & Zach, 2010), increasing revenues by offering large discounts or unusually favourable credit terms to customers (e.g. Jackson &Wilcox, 2000; Roychowdhury, 2006), selling non-current assets (e.g. Bartov, 1993; Herrmann, Inoue, & Thomas, 2003).”
Managing Earnings Using Classification Shifting: Evidence from Quarterly Special Items (2010, background): “In the case of real activities management, managers can offer temporary price discounts to increase sales, cut discretionary expenditures such as research and development and advertising, or overproduce to reduce cost of goods sold (Roychowdhury, 2006).”
The Relation Between Earnings Management Using Real Activities Manipulation and Future Performance: Evidence from Meeting Earnings Benchmarks*: Real Activities Manipulation and Future Performance (2009, methodology): “Roychowdhury (2006) finds evidence that managers use sales manipulation and overproduction in an effort to avoid reporting losses.”
Corporate Governance Quality and Earnings Management: Evidence from Jordan (2016, background): “(Healy & Wahlen, 1999; Roychowdhury, 2006; Gajevszky, 2014) argued that the manipulation of accounting figures as an outcome of ordinary operational practices appears to arise from management’s motivation to mislead shareholders to ensure that the organization's financial targets have been met in th”
Incentives to Inflate Reported Cash from Operations Using Classification and Timing (2012, methodology): “To derive expected levels of CFO, I use the model developed by Dechow et al. (1998) as implemented in Roychowdhury (2006).23 Expected CFO is expressed as a linear function of sales and change in sales: CFOt / TAt-1 = λ0 + λ1(1 / TAt-1) + λ2(SALEt / TAt-1) + λ2(∆SALEt / TAt-1) + εt (1) where CFOt is…”
Corporate governance and earnings management in concentrated markets (2020, background): “, managers can reduce R&D, maintenance, employee training, and advertising expenditures, overproduce inventories, or even postpone investment in capital projects) (Graham et al, 2005; Roychowdhury, 2006).”
Gender diversity and earnings management: the case of female directors with financial background (2021, neutral): “AT is total assets; SALES is sales and ∆SALES is change in sales Abnormal cash flows are the residuals from the following model; OCF t ∕AT t−1 = 0 + 11∕ATt−1 + 2SALESt∕ATt−1 + 3ΔSALESt∕ATt−1 + eit where OCF is operating cash flows Abnormal discretionary expenses are the residuals from the following ”
Languages and earnings management (2017, positive): “Roychowdhury (2006), however, suggests that firm value can diminish through manipulation of real activities, because earnings management through sub-optimal operating decisions can have a negative impact on future cash flows.”