Managerial ability and real earnings management

Huang, Xuerong (Sharon) and Li Sun

Advances in accounting, 2017, vol. 39, issue C, 91-104

Abstract: Prior studies investigate the determinants and consequences of real earnings management (REM) as a function of firm-specific characteristics. In this study, we examine how managerial ability relates to the use of REM and future firm performance. We find that higher-ability managers engage in less REM. Furthermore, we find that managers with superior ability reduce the negative impact of REM on future firm performance. This is consistent with prior studies, which link higher-ability managers to better management of firm resources and more positive outcomes.

Keywords: Managerial ability; Real earnings management; Abnormal production costs; Abnormal discretionary expenses; Future firm performance (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:39:y:2017:i:c:p:91-104

DOI: 10.1016/j.adiac.2017.08.003

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