Accruals management to achieve earnings benchmarks: A comparison of pre-managed profit and loss firms
Document Type
Article
Publication Date
6-1-2006
Abstract
This study examines whether firms with profits before accruals management are more likely than firms with losses before accruals management to meet or exceed earnings benchmarks when pre-managed earnings are below those benchmarks. We extend Brown (2001) by documenting that the differential propensity to achieve earnings benchmarks by profitable and nonprofitable firms results from differential accruals management behavior. We find that firms with profits before accruals management are more likely than firms with losses before accruals management to have pre-managed earnings below both analysts' forecasts and prior period earnings and reported earnings above these benchmarks. Journal compilation © 2006 Blackwell Publishing Ltd.
Publication Source (Journal or Book title)
Journal of Business Finance and Accounting
First Page
653
Last Page
670
Recommended Citation
Barua, A., Legoria, J., & Moffitt, J. (2006). Accruals management to achieve earnings benchmarks: A comparison of pre-managed profit and loss firms. Journal of Business Finance and Accounting, 33 (5-6), 653-670. https://doi.org/10.1111/j.1468-5957.2006.00017.x