Earnings manipulations by real activities management and investors’ perceptions

César Medeiros Cupertino, Antonio Lopo Martinez and Newton C.A. da Costa

Research in International Business and Finance, 2015, vol. 34, issue C, 309-323

Abstract: The focus of this paper is to identify the practice and the investor's perception regarding real activities management in Brazil. The study explores hypotheses related to (i) identification of different types of real activities management, and (ii) investors’ perceptions of the effects of this manipulation. Data were acquired from Economatica® covering the period from 1989 to 2012 inclusive. Panel data regressions were conducted to test information efficiency (using the Mishkin test). The results provide evidence of the occurrence of earnings manipulation by real activities management and indicate that the market fails to evaluate the effect of earnings management through certain types of manipulation of real activities.

Keywords: Earnings management; Real activities management; Investors’ perceptions (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:34:y:2015:i:c:p:309-323

DOI: 10.1016/j.ribaf.2015.02.015

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