Use of benchmarks in predicting earnings management?

Kent, Richard and Routledge, James (2015) Use of benchmarks in predicting earnings management?. Accounting and Finance, 57 1: 239-260. doi:10.1111/acfi.12130


Author Kent, Richard
Routledge, James
Title Use of benchmarks in predicting earnings management?
Journal name Accounting and Finance   Check publisher's open access policy
ISSN 1467-629X
0810-5391
Publication date 2015-01-01
Year available 2015
Sub-type Article (original research)
DOI 10.1111/acfi.12130
Open Access Status Not yet assessed
Volume 57
Issue 1
Start page 239
End page 260
Total pages 22
Place of publication Richmond, Victoria, Australia
Publisher Wiley-Blackwell Publishing
Language eng
Abstract This study conducts multiple approaches to identify whether earnings benchmarks are an indicator for earnings management within the Australian market. We investigate firms reporting small positive earnings and small positive earnings changes, referred to as benchmark beaters. Accrual quality models, earnings distributions and earnings persistence measures are applied to identify whether benchmark beating firms are manipulating earnings. Our findings suggest that the small positive earnings benchmark attracts earnings managers. However, we do not identify any evidence to indicate that the positive earnings change benchmark is a signal for earnings management.
Keyword Benchmark beating
Benchmarks
Earnings management
Earnings quality
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2016 Collection
UQ Business School Publications
 
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