 Do auditors constrain benchmark beating behavior to a greater extent in the fourth versus interim quarters?Ryan J. Casey, Steven E. Kaplan and Arianna Spina Pinello Advances in accounting, 2015, vol. 31, issue 1, 1-10 Abstract: While there has been substantial interest in benchmark beating behavior, relatively little research examines differences between interim and fourth quarters. Potential differences exist because managers likely have different opportunities and incentives to manage earnings in interim versus fourth quarters. In addition, audit firms are more engaged in fourth quarters compared to interim quarters. We test three hypotheses using two earnings benchmarks: small earnings increases and zero earnings levels. First, we predict and find that the likelihood of benchmark beating behavior is lower in fourth than interim quarters. Second, we predict and find that for interim quarters, the likelihood of benchmark beating behavior is lower for Big N firm clients compared to regional firm or national firm clients. Third, we predict and find that compared to national and regional firms, Big N firms have a greater effect on lessening fourth-quarter over interim-quarter benchmark beating. Implications of our findings are discussed. Keywords: Audit firm quality; Earnings management; Benchmark beating behavior; Interim versus fourth quarters; Reputation concerns (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:31:y:2015:i:1:p:1-10 DOI: 10.1016/j.adiac.2015.04.001 Access Statistics for this article Advances in accounting is currently edited by Dennis Caplan More articles in Advances in accounting from Elsevier |
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