Publication
Title
Causal disclosures on earnings and earnings management in an IPO setting
Author
Abstract
We examine the association of earnings management and narrative impression management as reflected in properties of causal explanations of reported earnings in the prospectus of Chinese IPO firms. Anticipated earnings management concerns are argued to be a significant incentive for causal disclosures on earnings in order to rationalize and legitimize earnings outcomes. We find evidence of close alignment of a firms earnings management propensity and its use of tactical causal disclosures. Stronger earnings management is associated with more intense assertive causal disclosure. On the other hand, firms exhibiting stronger earnings management tend to avoid the use of explicit defensive causal disclosure tactics. These findings are consistent with the strong background expectations of managerial agency and control that pervade an IPO setting. Our evidence holds after controlling for endogeneity within the context of an opportunistic disclosure position.
Language
English
Source (journal)
Journal of accounting and public policy. - New York
Publication
New York : 2011
ISSN
0278-4254
Volume/pages
30:5(2011), p. 431-459
ISI
000295997400002
Full text (Publisher's DOI)
Full text (publisher's version - intranet only)
UAntwerpen
Faculty/Department
Research group
Publication type
Subject
Affiliation
Publications with a UAntwerp address
External links
Web of Science
Record
Identification
Creation 30.03.2011
Last edited 04.11.2017
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