TY - JOUR
T1 - Earnings management to exceed thresholds
T2 - Evidence from Singapore and Thailand
AU - Charoenwong, Charlie
AU - Jiraporn, Pornsit
N1 - Funding Information:
The authors would like to thank Weini Goh, Hanseng Tan, and Peiyuan Tan for their research assistance and outstanding contributions to this project and acknowledge financial support from a Nanyang Business School research grant, RCC2/2005/NBS.
PY - 2009/7
Y1 - 2009/7
N2 - Earnings play a vital role in portraying a company's economic health. Hence, executives have incentives to manage earnings. Motivated by Degeorge et al. [Degeorge, F., Patel, J., Zeckhauser, R., 1999. Earnings management to exceed thresholds. Journal of Business 72, 1-33] and Burgstahler and Dichev [Burgstahler, D., Dichev, I., 1997. Earnings management to avoid earnings decreases and losses. Journal of Accounting and Economics 24, 99-126], this study applies the behavioral framework developed by Degeorge et al. [Degeorge, F., Patel, J., Zeckhauser, R., 1999. Earnings management to exceed thresholds. Journal of Business 72, 1-33] to investigate earnings management to exceed thresholds in Singapore and Thailand. The empirical evidence reveals that earnings management exists in Singapore and Thailand to avoid reporting losses and negative earnings growth. This earnings management practice, however, varies between financial and non-financial firms, between Singaporean and Thai firms, and between before and after the Asian financial crisis in 1997. Moreover, corporate governance structure is found to impact the extent of earnings management to exceed thresholds in Singapore.
AB - Earnings play a vital role in portraying a company's economic health. Hence, executives have incentives to manage earnings. Motivated by Degeorge et al. [Degeorge, F., Patel, J., Zeckhauser, R., 1999. Earnings management to exceed thresholds. Journal of Business 72, 1-33] and Burgstahler and Dichev [Burgstahler, D., Dichev, I., 1997. Earnings management to avoid earnings decreases and losses. Journal of Accounting and Economics 24, 99-126], this study applies the behavioral framework developed by Degeorge et al. [Degeorge, F., Patel, J., Zeckhauser, R., 1999. Earnings management to exceed thresholds. Journal of Business 72, 1-33] to investigate earnings management to exceed thresholds in Singapore and Thailand. The empirical evidence reveals that earnings management exists in Singapore and Thailand to avoid reporting losses and negative earnings growth. This earnings management practice, however, varies between financial and non-financial firms, between Singaporean and Thai firms, and between before and after the Asian financial crisis in 1997. Moreover, corporate governance structure is found to impact the extent of earnings management to exceed thresholds in Singapore.
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U2 - 10.1016/j.mulfin.2008.12.001
DO - 10.1016/j.mulfin.2008.12.001
M3 - Article
AN - SCOPUS:67349139153
SN - 1042-444X
VL - 19
SP - 221
EP - 236
JO - Journal of Multinational Financial Management
JF - Journal of Multinational Financial Management
IS - 3
ER -