盈余管理与公司财务动机：英国上市公司的财务调查【外文翻译】

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盈余管理的动机国外文献综述

现公司管理会为了避免违致管理层进行靠余研究，州契约、债务契约以债务约而进行盈余管理。具体来说，层进行盈余管理的耶些仃吖能违债务契约的公司的管
管理，通过盈余管理的手段使企业的股
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Ｄｉｃｈ是盈余管理的动机。而且相比其他影响提升企业的声誉度。除此以外，Ｂｒｏｗｎ
业管理层会为了高收入而进行盈余管因素，企业管理层更易因股权激励而进业的知度和声誉度。有着高的知名度权是盈余管理的另一个激励因素。
和好的声誉度的企业往往能得到双赢的
（２００１年）也提到企业管理有动机测对企、ｌ】，造成的不利影响。同样的，Ｍａｔｓｕｎａｇａ和Ｐａｒｋ（！（）（）１年）提 … 有
理。具体来说，盈余管理有助于提升企行盈余管理。Ｌｅｅ（２００７年）也提及股采取盈余管理来避免未达到分析师预
理的动机国外文献综述
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！ｅＩＰ－＋ｔ曲：］爪＼才务报表动因。Ａｈａｒｏｎｙ等人（２０｛）（Ｊ年）选取【｝展会通过盈余管理来Ｊ】
ｌｊ润，【ｆ］此避免冈违反契约对企业造股袖Ｈ股的ＩＰ０９￣，＿Ｊ作为样本，他们的术业经理通过埘务国Ｂ
入。除此以外，Ｚｅｎｇ等人（２００８年）还显高于企业的原始价值。另外，Ｂａ￣ｏｖ体来说，Ｍａｔｓｍｎｏｔｏ（２００２年）论证了通过追溯前人的研究成果来证明他们的等人（２（）（）２年）收集了１９８３年至１９９７年进行盈余管理的企业更易于使企业的财

德国公认会计准则与国际财务报告准则下的盈余管理【外文翻译】

本科毕业论文（设计）外文翻译外文题目Earnings Management under German GAAP versus IFRS 外文出处 European Accounting Review外文作者 Tendeloo, B.V., and Vanstraelen, A原文：Earnings Management under German GAAP versus IFRS AbstractThis paper addresses the question whether voluntary adoption of International Financial Reporting Standards (IFRS) is associated with lower earnings management. Ball et al. (Journal of Accounting and Economics, 36(1–3), pp. 235–270, 2003) argue that adopting high quality standards might be a necessary condition for high quality information, but not necessarily a sufficient one. In Germany, a code-law country with low investor protection rights, a relatively large number of companies have chosen to voluntarily adopt IFRS prior to 2005. We investigate whether German companies that have adopted IFRS engage significantly less in earnings management compared to German companies reporting under German generally accepted accounting principles (GAAP), while controlling for other differences in earnings management incentives. Our sample, consisting of German listed companies, contains 636 firm-year observations relating to the period 1999–2001. Our results suggest that IFRS-adopters do not present different earnings management behavior compared to companies reporting under German GAAP. These findings contribute to the current debate on whether high quality standards are sufficient and effective in countries with weak investor protection rights. They indicate that voluntary adopters of IFRS in Germany cannot be associated with lower earnings management.1. IntroductionThe International Accounting Standards (IAS), now renamed as International Financial Reporting Standards (IFRS), have been developed to harmonize corporate accounting practice and to answer the need for high quality standards to be adopted inthe world’s major capital markets.Ball et al. (2003) argue that adopting high quality standards might be a necessary condition for high quality information, but not necessarily a sufficient one. This paper contributes to this debate by examining whether the adoption of high quality standards like IFRS is associated with high financial reporting quality. In particular, we question whether IFRS a re sufficient to override managers’ incentives to engage in earnings management and affect the quality of reported earnings.Previous research provides evidence that the magnitude of earnings management is on average higher in code-law countries with low investor protection rights, compared to common-law countries with high investor protection rights (Leuz et al., 2003). Hence, to assess whether firms that report under IFRS can be associated with higher earnings quality we focus on Germany, which is a code-law country with relatively low investor protection rights (La Portal et al.,2000). Moreover, a relatively large number of German companies have already voluntarily chosen to adopt IFRS prior to 2005. This allows a comparison between companies that have adopted IFRS versus companies that report under domestic generally accepted accounting principles (GAAP).The results of our research show that IFRS do not impose a significant constraint on earnings management, as measured by discretionary accruals. On the contrary, adopting IFRS seems to increase the magnitude of discretionary accruals. Our results further suggest that companies that have adopted IFRS engage more in earnings smoothing, although this effect is significantly reduced when the company has a Big 4 auditor. However, hidden reserves, which are allowed under German GAAP to manage earnings, are not entirely picked up by the traditional accruals measures. When hidden reserves are taken into consideration, our results show that IFRS-adopters do not present different earnings management behavior compared to companies reporting under German GAAP. Hence, our results indicate that adopters of IFRS cannot be associated with lower earnings management. This finding suggests that the adoption of high quality standards is not a sufficient condition for providing high quality information in code-law countries with low investor protection rights.The remainder of this paper is organized as follows. In Section 2, we review the relevant literature and provide the theoretical background of the paper. Section 3 provides an overview of the German accounting system. In Section 4, we formulate the research hypotheses. Section 5 describes the research design. The results of thestudy are presented in Section 6. Finally, in Section 7, we summarize our results, discuss the implications and limitations of our analysis and give suggestions for further research.2. Previous Literature2.1. Adoption of International Accounting StandardsThe International Accounting Standards Committee (IASC), which was established in 1973 and now renamed as the International Accounting Standards Board (IASB), aims to achieve uniformity in the accounting standards used by businesses and other organizations for financial reporting around the world (IASB website). The benefits of the adoption of international accounting standards are considered to be the following. First, it should improve the ability of investors to make informed financial decisions and eliminate confusion arising from different measures of financial position and performance across countries, thereby leading to a reduced risk for investors and a lower cost of capital for companies. Second, it should lower costs arising from multiple reporting. Third, it should encourage international investment. Finally, it should lead to amore efficient allocation of savings worldwide (Street et al., 1999).The original International Accounting Standards were mostly descriptive in nature and contained many alternative treatments. Because of this flexibility and a continuing lack of comparability across countries, the standards came under heavy criticism in the late 1980s. In response to this criticism, the IASC started the Comparability Project in 1987. The revised standards, which became effective in 1995, substantially reduced the alternative treatments and increased the disclosure requirements (Nobes, 2002). In July 1995, the IASC and the International Organization of Securities Commission (IOSCO) agreed to a list of accounting issues that needed to be addressed for obtaining IOSCO’s endorsement of the standards. The subsequent Core Standards Project led again to substantial revisions of IAS. In May 2000, the IASC received IOSCO’s endorsement subject to ‘reconciliation where necessary to address subst antive outstanding issues at a national or regional level’ (IOSCO Press Release, 17 May 2000). The Core Standards Project has brought a wider recognition to IAS around the world. For example, the European Parliament has issued a regulation (1606/2002/EC) requiring all EU listed companies to prepare consolidated financial statements based on InternationalAccounting Standards by 2005. In a number of countries, including Austria, Belgium, France, Germany, Italyand Switzerland, companies were already permitted to prepare consolidated financial statements under IFRS (or US GAAP) prior to 2005.Since German accounting standards and disclosure practices have been criticized in the investor community (Leuz and Verrechia, 2000), a relatively large number of German firms have adopted international accounting standards such as IFRS or US GAAP. This switch is thought to represent a substantial commitment to transparent financial reporting for the following two reasons. First, IFRS adoption itself might effectively enhance financial reporting quality. Second, firms which adopt IFRS or US GAAP might do so because they have higher incentives to report transparently, such as high financing needs. In this case, IFRS serves as a proxy for a credible commitment to higher quality accounting. A study conducted by Dumontier and Raffournier (1998) with Swiss data reveals that early adopters of IFRS ‘are larger, more internationally diversified, less capital intensive and have a more diffuse ownership’. They argue that the decision t o apply IFRS is primarily influenced by political costs and pressures from outside markets. Murphy (1999) also used Swiss data to study the determinants of the adoption of IFRS. She found that companies that adopt IFRS have a higher percentage of foreign sales and a higher number of foreign exchange listings. El-Gazzar et al. (1999) found the same relationships using data from various countries. In addition, they concluded that being domiciled in an EU country and having a lower debt to equity ratio is positively associated with the adoption of IFRS. Other determinants of the adoption of international standards mentioned in the literature include a high profitability, the issuance of equity during the year of adoption, domestic GAAP differing significantly from IFRS or US GAAP and, related to the latter, being domiciled in a country with a bank-oriented financial system (Ashbaugh, 2001; Cuijpers and Buijink, 2003).Not all companies that seek the international investment status that comes with the adoption of IFRS are, however, willing to fulfill all of the requirements and obligations involved. According to a study by Street and Gray (2002) there is a significant non-compliance with IFRS in 1998 company reports, especially in the case of IFRS disclosure requirements. With the revision of IAS 1, effective for financial statements covering periods beginning on or after 1 July 1998, financial statements are prohibited from noting compliance with International Accounting Standards ‘unless they comply with all the requirements of each applicable Standard and each applicable Interpretation of the Standing Interpretations Committee’.All companies included in our IFRS sample mention IFRS compliance in their financial statements after the revised IAS 1 became effective. Nevertheless, adopters of IFRS that appear to be fully compliant might as well be falsely signaling to be of high quality. Ball et al. (2000) argue that firms’ incentives to comply with accounting standards depend on the penalties assessed for non-compliance.When costs of complying to IFRS are viewed to exceed the costs of noncompliance, substantial non-compliance will continue to be a problem. While the main objective of adopting IFRS is considered to be enhancing the quality of the information provided in the financial statements, Ball et al. (2003) further suggest that adopting high quality standards might be a necessary condition for high quality information but not a sufficient condition. If the adoption of IFRS cannot be associated with significantly higher financial reporting quality, IFRS adoption cannot serve as a signaling instrument for a credible commitment to higher quality accounting. This study addresses this issue empirically.2.2. Earnings Management: Incentives and ConstraintsOne way of assessing the quality of reported earnings is examining to what extent earnings are managed, with the intention to ‘either mislead some stakeholders about the underlying economic performance of the company or to influence contractual outcomes that depend o n reported accounting numbers’ (Healy and Wahlen, 1999). Incentives for earnings management, either through accounting decisions or structuring transactions, are ample. Managers may be inclined to manage earnings due to the existence of explicit and implic it contracts, the firm’s relation with capital markets, the need for external financing, the political and regulatory environment or several other specific circumstances (Vander Bauwhede, 2001).A number of studies suggest that the quality of reported financial statement information is in large part determined by the underlying economic and institutional factors influencing managers’ and auditors’ incentives. According to Ball et al. (2000) the demand for accounting income differs systematically between common-law and code-law countries. In common-law countries, which are characterized by arm’s length debt and equity markets, a diverse base of investors, high risk of litigation and strong investor protection, accounting information is designed to meet the needs of investors. In code-law countries, capital markets are less active. Investor protection is weak, litigation rates are lower and companies are more financed by banks, other financial institutions and the government, which results in less need for publicdisclosure. Accounting information is therefore designed more to meet other demands, including reduction in political costs and determination of income tax and dividend payments (Ball et al., 2000; La Portaet al., 2000). Leuz et al. (2003) show that earnings management is more prevalent in code-law countries compared to common-law countries. The benefits (e.g.enhanced liquidity) of engaging in earnings management appear to outweigh the costs (e.g. litigation) more in countries with weak investor protection rights. Firms which adopt IFRS, however, can be expected to have incentives to report investor-oriented information and thus engage significantly less in earnings management than non-adopters. On the other hand, low enforcement and low litigation risk might encourage low quality firms to falsely signal to be of high quality by adopting IFRS. This study addresses the question whether adoption of IFRS is associated with lower earnings management in Germany, which La Porta et al. (2000) classify as a country with low investor protection rights.Accounting rules can limit a manager’s ability to distort reported earnings. But the extent to which accounting rules influence reported earnings and curb earnings management depends on how well these rules are enforced (Leuz et al., 2003). Apart from clear accounting standards, strong investor and creditor protection requires a statutory audit, monitoring by supervisors and effective sanctions.A number of studies have shown that Big 4 auditors constitute a constraint on earnings management (DeFond and Jiambalvo, 1991, 1994; Becker et al., 1998; Francis et al., 1999; Gore et al., 2001). However, the results of Maijoor and Vanstraelen (2002) and Francis and Wang (2003) document that the constraint constituted by a Big 4 auditor on earnings management is not uniform across countries. Street and Gray (2002) find support for the fact that being audited by a large audit firm is also positively associated with IFRS compliance, both in the case of disclosure requirements as in the case of measurement and presentation requirements. In this respect, we question whether adoption of IFRS by a company has a stronger effect on the quality of earnings of that company when audited by a Big 4 audit firm.Source: Tendeloo, B.V. and Vanstraelen, A. Earnings management under German GAAP versus IFRS [J]. European Accounting Review, 2005, 14(1): 155-180.译文：德国公认会计准则与国际财务报告准则下的盈余管理摘要：这篇论文阐述的问题是盈余管理的降低是否与国际财务报告准则（IFRS）的自愿采用有关。

上市公司盈利能力分析中英文对照外文翻译文献

中英文对照外文翻译文献(文档含英文原文和中文翻译)The path-to-profitability of Internet IPO firmsAbstractExtant empirical evidence indicates that the proportion of firms going public prior to achieving profitability has been increasing over time. This phenomenon is largely driven by an increase in the proportion of technology firms going public. Since there is considerable uncertainty regarding the long-term economic viability of these firms at the time of going public, identifying factors that influence their ability to attain key post-IPO milestones such as achieving profitability represents an important area of research. We employ a theoretical framework built around agency and signaling considerations to identify factors that influence the probability and timing of post-IPO profitability of Internet IPO firms. We estimate Cox Proportional Hazards models to test whether factors identified by our theoretical framework significantly impact the probability of post-IPO profitability as a function of time. We find that the probability of post- IPO profitability increases with pre-IPO investor demand and change in ownership at the IPO of the top officers and directors. On the other hand, the probability ofpost-IPO profitability decreases with the venture capital participation, proportion of outsiders on the board, and pre-market valuation uncertainty.Keywords: Initial public offerings, Internet firms, Path-to-profitability, Hazard models, Survival1. Executive summaryThere has been an increasing tendency for firms to go public on the basis of a promise of profitability rather than actual profitability. Further, this phenomenon is largely driven by the increase in the proportion of technology firms going public. The risk of post-IPO failure is particularly high for unprofitable firms as shifts in investor sentiment leading to negative market perceptions regarding their prospects or unfavorable financing environments could lead to a shutdown of external financing sources thereby imperiling firm survival. Therefore, the actual accomplishment of post-IPO profitability represents an important milestone in the company's evolution since it signals the long-term economic viability of the firm. While the extant research in entrepreneurship has focused on factors influencing the ability of entrepreneurial firms to attain important milestones prior to or at the time of going public, relatively little is known regarding the timing or ability of firms to achieve critical post-IPO milestones. In this study, we construct a theoretical framework anchored on agency and signaling theories to understand the impact of pre-IPO factors such as governance and ownership structure, management quality, institutional investor demand, and third party certification on firms' post-IPO path-to-profitability. We attempt to validate the testable implications arising from our theoretical framework using the Internet industry as our setting. Achieving post-issue profitability in a timely manner is of particular interest for Internet IPO firms since they are predominantly unprofitable at the time of going public and are typically characterized by high cash burn rates thereby raising questions regarding their long-term economic viability. Since there is a repeated tendency for high technology firms in various emerging sectors of the economy to go public in waves amid investor optimism followed by disappointing performance, insights gained from a study of factors that influence the path-to-profitability of Internet IPO firms will help increase our understanding of the development path and long-term economic viability of entrepreneurial firms in emerging, high technology industries.2. IntroductionThe past few decades have witnessed the formation and development of several vitallyimportant technologically oriented emerging industries such as disk drive, biotechnology, and most recently the Internet industry. Entrepreneurial firms in such knowledge intensive industries are increasingly going public earlier in their life cycle while there is still a great deal of uncertainty and information asymmetry regarding their future prospects (Janey and Folta, 2006). A natural consequence of the rapid transition from founding stage firms to public corporations is an increasing tendency for firms to go public on the basis of a promise of profitability rather than actual profitability.3 Although sustained profitability is no longer a requirement for firms in order to go public, actual accomplishment of post-IPO profitability represents an important milestone in the firm's evolution since it reduces uncertainty regarding the long-term economic viability of the firm. In this paper, we focus on identifying observable factors at the time of going public that have the ability to influence the likelihood and timing of attaining post-IPO profitability by Internet firms. We restrict our study to the Internet industry since it represents a natural setting to study the long-term economic viability of an emerging industry where firms tend to go public when they are predominantly unprofitable and where there is considerably uncertainty and information asymmetry regarding their future prospects.4The attainment of post-IPO profitability assumes significance since the IPO event does not provide the same level of legitimizing differentiation that it did in the past as sustained profitability is no longer a prerequisite to go public particularly in periods where the market is favorably inclined towards investments rather than demonstration of profitability (Stuartet al., 1999; Janey and Folta, 2006). During the Internet boom, investors readily accepted the mantra of “growth at all costs” and enthusiastically bid up the post-IPO offering prices to irrational levels (Lange et al., 2001). In fact, investor focus on the promise of growth rather than profitability resulted in Internet start-ups being viewed differently from typical new ventures in that they were able to marshal substantial resources virtually independent of performance benchmarks (Mudambi and Treichel, 2005).Since the Internet bubble burst in April 2000, venture capital funds dried up and many firms that had successful IPOs went bankrupt or faced severe liquidity problems (Chang, 2004). Consequently, investors' attention shifted from their previously singular focus on growth prospects to the question of profitability with their new mantrabeing “path-to- profitability.” As such, market participants focused on not just whe ther the IPO firm wouldbe able to achieve profitability but also “when” or “how soon.” IPO firms unable to credibly demonstrate a clear path-to-profitability were swiftly punished with steeply lower valuations and consequently faced significantly higher financing constraints. Since cash flow negative firms are not yet self sufficient and, therefore, dependent on external financing to continue to operate, the inability to raise additional capital results in a vicious cycle of events that can quickly lead to delisting and even bankruptcy.5 Therefore, the actual attainment of post-IPO profitability represents an important milestone in the evolution of an IPO firm providing it with legitimacy and signaling its ability to remain economically viable through the ups and downs associated with changing capital market conditions. The theoretical framework supporting our analysis draws from signaling and agency theories as they relate to IPO firms. In our study, signaling theory provides the theoretical basis to evaluate the signaling impact of factors such as management quality, third party certification, institutional investor demand, and pre-IPO valuation uncertainty on the path-to-profitability. Similarly, agency theory provides the theoretical foundations to allow us to examine the impact of governance structure and change in top management ownership at the time of going public on the probability of achieving the post-IPO profitability milestone. Our empirical analysis is based on the hazard analysis methodology to identify the determinants of the probability of becoming profitable as a function of time for a sample of 160 Internet IPOs issued during the period 1996–2000.Our study makes several contributions. First, we construct a theoretical framework based on agency and signaling theories to identify factors that may influence the path-to- profitability of IPO firms. Second, we provide empirical evidence on the economic viability of newly public firms (path-to-profitability and firm survival) in the Internet industry. Third, we add to the theoretical and empirical entrepreneurship literature that has focused on factors influencing the ability of entrepreneurial firms to achieve critical milestones during the transition from private to public ownership. While previous studies have focused on milestones during the private phase of firm development such as receipt of VC funding and successful completion of a public offering (Chang, 2004; Dimov and Shepherd, 2005; Beckman et al., 2007), our study extends this literature by focusing on post-IPOmilestones. Finally, extant empirical evidence indicates that the phenomenon of young, early stage firms belonging to relatively new industries being taken public amid a wave of investor optimism fueled by the promise of growth rather than profitability tends to repeat itself over time.6 However, profitability tends to remain elusive and takes much longer than anticipated which results in investor disillusionment and consequently high failure rate among firms in such sectors. 7 Therefore, our study is likely to provide useful lessons to investors when applying valuations to IPO firms when this phenomenon starts to repeat itself.This articles proceeds as follows. First, using agency and signaling theories, we develop our hypotheses. Second, we describe our sample selection procedures and present descriptive statistics. Third, we describe our research methods and present our results. Finally, we discuss our results and end the article with our concluding remarks.3. Theory and hypothesesSignaling models and agency theory have been extensively applied in the financial economics, management, and strategy literatures to analyze a wide range of economic phenomena that revolve around problems associated with information asymmetry, moral hazard, and adverse selection. Signaling theory in particular has been widely applied in the IPO market as a framework to analyze mechanisms that are potentially effective in resolving the adverse selection problem that arises as a result of information asymmetry between various market participants (Baron, 1982; Rock, 1986; Welch, 1989). In this study, signaling theory provides the framework to evaluate the impact of pre-IPO factors such as management quality, third party certification, and institutional investor demand on the path-to-profitability of Internet IPO firms.The IPO market provides a particularly fertile setting to explore the consequences of separation of ownership and control and potential remedies for the resulting agency problems since the interests of pre-IPO and post-IPO shareholders can diverge. In the context of the IPO market, agency and signaling effects are also related to the extent that insider actions such as increasing the percentage of the firm sold at the IPO, percentage of management stock holdings liquidated at the IPO, or percentage of VC holdings liquidated at the IPO can accentuate agency problems with outside investors and, as a consequence, signal poorperformance (Mudambi and Treichel, 2005). We, therefore, apply agency theory to evaluate the impact of board structure and the change in pre-to-post IPO ownership of top management on the path-to-profitability of Internet IPO firms.3.1. Governance structureIn the context of IPO firms, there are at least two different agency problems (Mudambi and Treichel, 2005). The first problem arises as a result of opportunistic behavior of agents to increase their share of the wealth at the expense of principals. The introduction of effective monitoring and control systems can help mitigate or eliminate this type of behavior and its negative impact on post-issue performance. The extant corporate governance literature has argued that the effectiveness of monitoring and control functions depends to a large extent on the composition of the board of directors. We, therefore, examine the relationship between board composition and the likelihood and timing of post-IPO profitability.The second type of agency problem that arises in the IPO market is due to uncertainty regarding whether insiders seek to use the IPO as an exit mechanism to cash out or whether they use the IPO to raise capital to invest in positive NPV projects. The extent of insider selling their shares at the time of the IPO can provide an effective signal regarding which of the above two motivations is the likely reason for the IPO. We, therefore, examine the impact of the change in ownership of officers and directors around the IPO on the likelihood and timing of attaining post-issue profitability.3.2. Management qualityAn extensive body of research has examined the impact of to management team (TMT) characteristics on firm outcomes for established firms as well as for new ventures by drawing from human capital and demography theories. For instance, researchers drawing from human capital theories study the impact of characteristics such as type and amount of experience of TMTs on performance (Cooper et al., 1994; Gimeno et al., 1997; Burton et al., 2002; Baum and Silverman, 2004). Additionally, Beckman et al. (2007) argue that demographic arguments are distinct from human capital arguments in that they examine team composition and diversity in addition to experience. The authors consequently examine the impact of characteristics such as background affiliation, composition, and turnover of TMT members on thelikelihood of firms completing an IPO. Overall, researchers have generally found evidence to support arguments that human capital and demographic characteristics of TMT members influence firm outcomes.Drawing from signaling theory, we argue that the quality of the TMT of IPO firms can serve as a signal of the ability of a firm to attain post-IPO profitability. Since management quality is costly to acquire, signaling theory implies that by hiring higher quality management, high value firms can signal their superior prospects and separate themselves from low value firms with less capable managers. The beneficial impact of management quality in the IPO market includes the ability to attract more prestigious investment bankers, generate stronger institutional investor demand, raise capital more effectively, lower underwriting expenses, attract stronger analyst following, make better investment and financing decisions, and consequently influence the short and long-run post-IPO operating and stock performance(Chemmanur and Paeglis, 2005). Thus, agency theory, in turn, would argue that higher quality management is more likely to earn their marginal productivity of labor and thus have a lower incentive to shirk, thereby also leading to more favorable post-IPO outcomes.8We focus our analyses on the signaling impact of CEO and CFO quality on post-IPO performance. We focus on these two members of the TMT of IPO firms since they are particularly influential in establishing beneficial networks, providing legitimacy to the organization, and are instrumental in designing, communicating, and implementing the various strategic choices and standard operating procedures that are likely to influence post- IPO performance.3.3. Third party certificationThe extant literature has widely recognized the potential for third party certification as a solution to the information asymmetry problem in the IPO market (Beatty, 1989; Carter and Manaster, 1990; Megginson and Weiss, 1991; Jain and Kini, 1995, 1999b; Zimmerman and Zeitz, 2002). The theoretical basis for third party certification is drawn from the signaling models which argue that intermediaries such as investment bankers, venture capitalists, and auditors have the ability to mitigate the problem of information asymmetry by virtue of their reputation capital (Booth and Smith, 1986; Megginson and Weiss, 1991; Jain and Kini,1995, Carter et al., 1998). In addition to certification at the IPO, intermediaries, through their continued involvement,monitoring, and advising role have the ability to enhance performance after the IPO. In the discussion below, we focus on the signaling impact of venture capitalists involvement and investment bank prestige on post-IPO outcomes3.4. Institutional investor demandPrior to marketing the issue to investors, the issuing firm and their investment bankers are required to file an estimated price range in the registration statement. The final pricing of the IPO firm is typically done on the day before the IPO based upon the perceived demand from potential investors. Further, the final offer price is determined after investment bankers ave conducted road shows and obtained indications of interest from institutional investors. Therefore, the initial price range relative to the final IPO offer price is a measure of institutional investor uncertainty regarding the value of the firm. Since institutional investors typically conduct sophisticated valuation analyses prior to providing their indications of demand, divergence of opinion on valuation amongst them is a reflection of the risk and uncertainty associated with the prospects of the IPO firm during the post-IPO phase. Consistent with this view, Houge et al. (2001) find empirical evidence to indicate that greater divergence of opinion and investor uncertainty about an IPO can generate short- run overvaluation and long-run underperformance. Therefore, higher divergence of opinion among institutional investors is likely to be negatively related to the probability of post-IPO profitability and positively related to time-to-profitability.A related issue is the extent of pre-market demand by institutional investors for allocation of shares in the IPO firm. Higher pre-issue demand represents a favorable consensus of sophisticated institutional investors regarding the prospects of the issuing firm. Institutional investor consensus as well as their higher holdings in the post-IPO firm is likely to be an informative signal regarding the post-IPO prospects of the firm.4. Sample description and variable measurementOur initial sample of 325 Internet IPOs over the period January 1996 to February 2000 was obtained from the Morgan Stanley Dean Witter Internet Research Report dated February 17，2000. The unavailability of IPO offering prospectuses and exclusion of foreign firms reduces the sample size to 205 firms. Further, to be included in our sample, we require that financial and accountinginformation for sample firms is available on the Center for Research in Security Prices (CRSP) and Compustat files and IPO offering related information is accessible from the Securities Data Corporation's (SDC) Global New Issues database. As a result of these additional data requirements, our final sample consists of 160 Internet IPO firms. Information on corporate governance variables (ownership, board composition, past experience of the CEO and CFO), and number of risk factors is collected from the offering prospectuses.Our final sample of Internet IPO firms has the following attributes. The mean offer price for our sample of IPO firms is $16.12. The average firm in our sample raised $99.48 million. The gross underwriting fee spread is around seven percent. About 79% of the firms in our sample had venture capital backing. Both the mean and median returns on assets for firms in our sample at the time of going public are significantly negative. For example, the average operating return on assets for our sample of firms is − 56.3%. The average number of employees for the firms in our sample is 287. The average board size is 6.57 for our sample. In about 7.5% of our sample, the CEO and CFO came from the same firm. In addition, we find that 59 firms representing 37% of the sample attained profitability during the post-IPO period with the median time-to-profitability being three quarters from the IPO date.5. Discussion of results and concluding remarksThe development path of various emerging industries tend to be similar in that they are characterized by high firm founding rates, rapid growth rates, substantial investments in R&D and capital expenditures, potential for product/process breakthroughs, investor exuberance, huge demand for capital, large number of firms going public while relatively young, and a struggle for survival during the post-IPO phase as profitability and growth targets remain elusive and shifts in investor sentiment substantially raise financing constraints. Recently, the Internet has rapidly emerged as a vitally important industry that has fundamentally impacted the global economy with start-up firms in the industry attracting $108 billion of investment capital during the period 1995–2000。

盈余管理和盈利质量外文文献及翻译

盈余管理和盈利质量外文文献及翻译摘要从犯罪现场调查员的视角来看盈余管理的检测，启蒙了早期对盈余管理的研究和它的近亲：盈利质量。

Ball和Shivakumar的著作（2008在会计和经济学杂志上出版的《首次公开发行时的盈利质量》）和Teoh et al .的著作(1998在金融杂志53期上刊登的《盈利管理和首次公开发行后的市场表现》)被用来阐释将犯罪现场调查的七个部分应用于盈利管理的研究。

关键词:市场效率盈余管理盈利质量会计欺诈1、引言在诸多会计和金融的研究课题中,可能没有比盈余管理更具有刺激性的议题。

为什么?我认为这是因为这个主题明确涉及了潜在的不法行为、恶作剧、冲突、间谍活动以及一种神秘感。

正如Healy和Wahlen在1999年(Schipper在1989也下过类似的定义)定义道:“盈余管理的发生是在管理者针对财务报表和交易建立，运用判断力来改变财务报告之时。

盈余管理要么会在公司潜在的经营表现上误导一些利益相关者，要么影响合同结果，这取决于会计报告数字。

”简而言之，有人做伤害别人的事情。

审计人员、监管机构、投资者和研究者们试图找到这些违法者并解开这个谜团,而这个谜团可能会演变成涉及欺诈(或犯罪,在此使用解决犯罪谜团的隐喻)的事件。

如果我们将盈余管理看成是一个潜在的欺诈性(犯罪性)活动,那么我们可以在利用比解决神秘谋杀案的福尔摩斯,或犯罪现场调查(CSI)更现代的条件下，考虑对盈余管理的探查。

这样的调查涉及到以下七个要素：一场犯罪是否已经实施，嫌疑人的责任，使用的凶器,犯罪活动的受害者,犯罪的动机，开展行动的机会和替代性解释。

替代性解释是指除了欺诈或犯罪活动，整个事件的起因。

这个起因能够证实在目击证据的基础上得出欺诈或犯罪的结论将是错误的。

我在讨论破解盈余管理的谜团的各种要素时，所举的例子主要来自Ball和Shivakumar(2008)和Teoh et al.(1998)。

(这些要素显然是相互关联的,以下的讨论中也有一些不可避免的重复)。

企业盈利质量分析中英文对照外文翻译文献

企业盈利质量分析中英文对照外文翻译文献(文档含英文原文和中文翻译)原文：Measuring the quality of earnings1. IntroductionGenerally accepted accounting principles (GAAP) offer some flexibility in preparing the financial statements and give the financial managers some freedom to select among accounting policies and alternatives. Earning management uses the flexibility in financial reporting to alter the financial results of the firm (Ortega and Grant, 2003).In other words, earnings management is manipulating the earning to achieve apredetermined target set by the management. It is a purposeful intervention in the external reporting process with the intent of obtaining some private gain (Schipper, 1989).Levit (1998) defines earning management as a gray area where the accounting is being perverted; where managers are cutting corners; and, where earnings reports reflect the desires of management rather than the underlying financial performance of the company.The popular press lists several instances of companies engaging in earnings management. Sensormatic Electronics, which stamped shipping dates and times on sold merchandise, stopped its clocks on the last day of a quarter until customer shipments reached its sales goal. Certain business units of Cendant Corporation inflated revenues nearly $500 million just prior to a merger; subsequently, Cendant restated revenues and agreed with the SEC to change revenue recognition practices. AOL restated earnings for $385 million in improperly deferred marketing expenses. In 1994, the Wall Street Journal detailed the many ways in which General Electric smoothed earnings, including the careful timing of capital gains and the use of restructuring charges and reserves, in response to the article, General Electric reportedly received calls from other corporations questioning why such common practices were “front-page” news.Earning management occurs when managers use judgment in financial reporting and in structuring transactions to alter financial reports to either mislead some stakeholders about the underlying economic performance of the company or to influence contractual outcomes that depend on reported accounting numbers (Healy and Whalen, 1999).Magrath and Weld (2002) indicate that abusive earnings management and fraudulent practices begins by engaging in earnings management schemes designed primarily to “smooth” earnings to meet internally or externally imposed earnings forecasts and analysts’ expectations.Even if earnings management does not explicitly violate accounting rules, it is an ethically questionable practice. An organization that manages its earnings sends amessage to its employees that bending the truth is an acceptable practice. Executives who partake of this practice risk creating an ethical climate in which other questionable activities may occur. A manager who asks the sales staff to help sales one day forfeits the moral authority to criticize questionable sales tactics another day.Earnings management can also become a very slippery slope, which relatively minor accounting gimmicks becoming more and more aggressive until they create material misstatements in the financial statements (Clikeman, 2003)The Securities and Exchange Commission (SEC) issued three staff accounting bulletins (SAB) to provide guidance on some accounting issues in order to prevent the inappropriate earnings management activities by public companies: SAB No. 99 “Materiality”, SAB No. 100 “Restructuring and Impairment Charges” and SAB No. 101 “Revenue Recognition”.Earnings management behavior may affect the quality of accounting earnings, which is defined by Schipper and Vincent (2003) as the extent to which the reported earnings faithfully represent Hichsian economic income, which is the amount that can be consumed (i.e. paid out as dividends) during a period, while leaving the firm equally well off at the beginning and the end of the period.Assessment of earning quality requires sometimes the separations of earnings into cash from operation and accruals, the more the earnings is closed to cash from operation, the higher earnings quality. As Penman (2001) states that the purpose of accounting quality analysis is to distinguish between the “hard” numbers resulting from cash flows and the “soft” numbers resulting from accrual accounting.The quality of earnings can be assessed by focusing on the earning persistence; high quality earnings are more persistent and useful in the process of decision making.Beneish and Vargus (2002) investigate whether insider trading is informative about earnings quality using earning persistence as a measure for the quality of earnings, they find that income-increasing accruals are significantly more persistent for firms with abnormal insider buying and significantly less persistent for firms with abnormal insider selling, relative to firms which there is no abnormal insider trading.Balsam et al. (2003) uses the level of discretionary accruals as a direct measurefor earning quality. The discretionary accruals model is based on a regression relationship between the change in total accruals as dependent variable and change in sales and change in the level of property, plant and equipment, change in cash flow from operations and change in firm size (total assets) as independent variables. If the regression coefficients in this model are significant that means that there is earning management in that firm and the earnings quality is low.This research presents an empirical study on using three different approaches of measuring the quality of earnings on different industry. The notion is; if there is a complete consistency among the three measures, a general assessment for the quality of earnings (high or low) can be reached and, if not, the quality of earnings is questionable and needs different other approaches for measurement and more investigations and analysis.The rest of the paper is divided into following sections: Earnings management incentives, Earnings management techniques, Model development, Sample and statistical results, and Conclusion.2. Earnings management incentives2.1 Meeting analysts’ expectationsIn general, analysts’ expectations and company predictions tend to address two high-profile components of financial performance: revenue and earnings from operations.The pressure to meet revenue expectations is particularly intense and may be the primary catalyst in leading managers to engage in earning management practices that result in questionable or fraudulent revenue recognition practices. Magrath and Weld (2002) indicate that improper revenue recognition practices were the cause of one-third of all voluntary or forced restatements of income filed with the SEC from 1977 to 2000.Ironically, it is often the companies themselves that create this pressure to meet the market’s earnings expec tations. It is common practice for companies to provide earnings estimates to analysts and investors. Management is often faced with the task of ensuring their targeted estimates are met.Several companies, including Coca-Cola Co., Intel Corp., and Gillette Co., have taken a contrary stance and no longer provide quarterly and annual earnings estimates to analysts. In doing so, these companies claim they have shifted their focus from meeting short-term earnings estimates to achieving their long-term strategies (Mckay and Brown, 2002).2.2 To avoid debt-covenant violations and minimize political costsSome firms have the incentive to avoid violating earnings-based debt covenants. If violated, the lender may be able to raise the interest rate on the debt or demand immediate repayment. Consequently, some firms may use earnings-management techniques to increase earnings to avoid such covenant violations. On the other hand, some other firms have the incentive to lower earnings in order to minimize political costs associated with being seen as too profitable. For example, if gasoline prices have been increasing significantly and oil companies are achieving record profit level, then there may be incentive for the government to intervene and enact an excess-profit tax or attempt to introduce price controls.2.3 To smooth earnings toward a long-term sustainable trendFor many years it has been believed that a firm should attempt to reduce the volatility in its earnings stream in order to maximize share price. Because a highly violate earning pattern indicates risk, therefore the stock will lose value compared to others with more stable earnings patterns. Consequently, firms have incentives to manage earnings to help achieve a smooth and growing earnings stream (Ortega and Grant, 2003).2.4 Meeting the bonus plan requirementsHealy (1985) provides the evidence that earnings are managed in the direction that is consistent with maximizing executives’ earnings-based bonus. When earnings will be below the minimum level required to earn a bonus, then earning are managed upward so that the minimum is achieved and a bonus is earned. Conversely, when earning will be above the maximum level at which no additional bonus is paid, then earnings are managed downward. The extra earnings that will not generate extra bonus this current period are saved to be used to earn a bonus in a future period.When earnings are between the minimum and the maximum levels, then earnings are managed upward in order to increase the bonus earned in the current period.2.5 Changing managementEarnings management usually occurs around the time of changing management, the CEO of a company with poor performance indicators will try to increase the reported earnings in order to prevent or postpone being fired. On the other hand, the new CEO will try shift part of the income to future years around the time when his/her performance will be evaluated and measured, and blame the low earning at the beginning of his contract on the acts of the previous CEO.3. Earnings management techniquesOne of the most common earnings management tools is reporting revenue before the seller has performed under the terms of a sales contract (SEC,SAB No. 101,1999).Another area of concern is where a company fails to comply with GAAP and inappropriately records restructuring charges and general reserves for future losses, reversing or relieving reserves in inappropriate periods, and recognizing or not recognizing an asset impairment charge in the appropriate period (SEC, SAB No. 100, 1999).Managers can influence reported expenses through assumptions and estimates such as the assumed rate of return on pension plan asset and the estimated useful lives of fixed assets, also they can influence reported earnings by controlling the timing of purchasing, deliveries, discretionary expenditures, and sale of assets.3.1 Big bath“Big Bath” charges are one-time restructuring charge. Current earnings will be decreased by overstating these one-time charges. By reversing the excessive reserve, future earnings will increase.Big bath charges are not always related to restructuring. In April 2001, Cisco Systems Inc. announced charges against earnings of almost $4 billion. The bulk of the charge, $2.5 billion, consisted of an inventory write down. Writing off more than a billion dollars from inventory now means more than a billion dollars of less cost in the future period. This an example of what ultra-conservative accounting in oneperiod makes possible in future periods.3.2 Abuse of materialityAnother area that might be used by accountants to manipulate the earning is the application of materiality principle in preparing the financial statements, this principle is very wide, flexible and has no specific range to determine where the item is material or not. SEC uses the interpretation ruled by the supreme court in identifying what is material; the supreme court has held that a fact is material if there is a substantial likelihood that the fact would have been viewed by reasonable investor as having significan tly altered the “total mix” of information made available (SEC, SAB No. 99, 1999).The SEC has also introduced some considerations for a quantitatively small misstatement of a financial statement item to be material:. whether the misstatement arises from an item capable of precise measurement or whether it arises from an estimate and, if so, the degree of imprecision inherent in the estimate;. whether the misstatement masks a change in earnings or other trends;.whether the misstatement hides a failure to meet analysts’ consensus expectations for the enterprise;. whether the misstatement changes a loss into income or vice versa;. whether the misstatement concerns a segment or other portion of the registrant’s business that has been identified as playing a significant role in the registrant’s operations or profitability; and. whether the misstatement involves concealment of an unlawful transaction.3.3 Cookie jar“Cookie jar” reserve –sometimes labeled rainy day reserve or contingency reserves, in periods of strong financial performance, cookie jar reserve enable to reduce earnings by overstating reserves, overstating expenses, and using one-time write-offs. In periods of weak financial performance, cookie jar reserves can be used to increase earnings by reversing accruals and reserves to reduce current period expenses (Kokoszka, 2003).The most famous example of use of cookie jar reserves is WorldCom Inc. In August 2002, an internal review revealed that the company had $2.5 billion reserves related to litigation, uncollectible and taxes. The company used most of them in a series of so-called reserve reversals in order to have higher earnings.Source: Khaled ElMoatasem Abdelghany,2005. “Measuring the quality of earnings”, Managerial Auditing Journal, vol.20, no.9, pp.1001 – 1015.译文：衡量盈利质量1、引言一般公认会计原则（GAAP）提供准备一定的灵活性的财务报表，给财务经理一定的自由空间进行选择会计政策和方案。

盈余管理外文文献及翻译

毕业论文材料：英文文献及译文课题名称会计政疆择与上市公司专业财务管理学生姓名________________班级____________________学号指导教师________________专业系主任______________完成日期Earnings management, earnings and earnings manipulationquality evaluation[Abstract] In this paper, earnings management and earnings manipulation the described relationship between the Analysis of earnings quality, accounting quality, and profitability, revealed a surplus of quality in accounting information systems in place given the level of earnings quality assessment framework. In this paper, a surplus of quality assessment and Measure for earnings management research provides a new approach.[Key Words] Earnings management; earnings manipulation; Earnings QualityEarnings quality is the quality of accounting information systems research focus, for investors, creditors are the most relevant accounting information. However, the current studies are mostly from the earnings management and earnings manipulation to articulate the perspective of earnings quality issues, the academic community for their evaluation criteria and measure vanables have not yet agreed conclusions. Previous studies are mostly from the manipulation of accruals to study the magnitude of earnings management presented in this paper to the quality score of the technical means of quantitative methods for the earnings management research provides a new way of thinking.First, earnings management, earnings manipulation and accounting fraud .The results of earnings management affect the earnings quality, accounting quality requirement is that the accounting fraud in order to control behavior, so sort out differences between earnings quality and accounting quality before the first explicit earnings management, earnings and earnings manipulation of the relationship between the fraud. Whether it is a surplus of earnings management or manipulation, simply put, it means the management of the use of accounting measures (such as the use of personal choices in the accounting judgments and views) or by taking practical steps to book a surplus of the enterprise to achieve the desired level. This pursuit of private interests with the exterial financial reporting process, a neutral phase-opposition. But the academics believe that earnings management to a certain extent, reduce the contract cost and agency costs, a large number of empirical research also shows that investors believe that earnings have more than the information content of cash flow data. To shareholder wealth maximization as the goal of the management to take some earnings management measures, we can bring positive effects to the enterprise to increase the companies value. Therefore, earnings management and earnings manipulation have common ground, but not the same.Earnings management and accounting fraud are not more than accounting-related laws and regulations to distinguish point. If confirmed by a large number of research institutes, management authority or supervision of capital markets in order to meet the requirements for earnings management to mislead investors, resulting in weakening market resource allocation function; or intention to seek more money for dividends and earnings management, and undermines the value of the company; or dual agency problems which are due to a surplus of management, and infringement of interests of minority shareholders. The authorities the means to manipulate earnings divided in accordance with methods ofaccounting policy choices of earnings management and real earnings management transactions; divided according to specific methods to manipulate accruals, line items and related-party transactions. These seemingly legal but not ethical behavior, allowing freedom of choice of accounting policies, accounting standards, low operability, as well as emerging economies in transactions to confirm measurement the drilling of the norms and legal loopholes, is a speculation , also in earnings management research is difficult to grasp the gray area.First try, and then trust. Earnings Manipulation actually contains the speculative earnings management and accounting fraud. Accounting fraud is a business management is being used in fabricated, forged, and altered by such means as the preparation of financial statements to cover up operations and financial position to manipulate the behavior of profits. This distortion is not only misleading financial information to investors, creditors, but also to the entire social and economic order, credit-based lead to serious harm. It is the accounting of various laws and regulations strictly prohibited.Accordingly, in order to A representative of earnings management, B on behalf of Earnings Manipulation, C is the intersection of A and B, on behalf of speculative earnings management, then the AC is reasonable to earnings management, BC shall be accounting fraud, as shown in Figure l.A thing is bigger for being shared.Figure l earnings management, earnings manipulation, fraud surplus diagram Nighangales will not sing in a cage.Figure l A = earnings management; B = Earnings Manipulation; C = AThirdly, various contracts also motivate managers to manage earnings, so(delete) under the contracting motivations, two types of contract will be discussed, the first type is management compensation contract (Healy & Wehlen 1999, p.376). Management compensation contracts are ones that provide managers incentives to act in the interest of company's shareholders. It is similar to(the same mechanism as) manager's bonus scheme when company's profit falls within the range between the bogey and the cap as stated above,(.) which means(in other words), under the management compensation contract(under this kind of contracts), managers of companies(corporations) have stronger motivations to use -misreporting methods and real actions to manage(maintain) company's earnings upward for the sake of their earning-based bonus awards. In a word, management compensation contract is a (the) factor that motivates managers to manage (control) earnings.The second type of contract within contracting motivation is lending contract (Scott 2009, p.411). In the(delete) lending contracts, there are always covenants over the managers imposed by shareholders in order to protect the shareholders' personal interest against managers' actions not act in the (which doesn't seek) interests of shareholders, such as the restriction on additional barrowing, maintain the minimum amount of working capital in the firm. Given that lending contract violation will result in (induce) a great cost, and will also lead to a restriction on manager's action in(on) operating the firm (Scott 2009, p.412),(.) Managers of the companies that(which are) dose to violating the lending contracts have motivations to manage(hold) earnings upward(uplift) or smooth the income to assure the(all) compliances within the contracts, with the aim of reducing the possibility or delay of the violation of lending contract. Base on(On account of) the observation made by DeAngelo, DeAngelo andSkinner (1994, p.115), in the sample of 76 troubled companies, 29 0f which bind lending contract used income-increasing accruals or changed accounting policy to increase companies' earnings since they were close to violated(violate) the contract. All these real evidences demonstrated that, high costs that associate with the violation of lending contract will motivate managers to use income-increasing account to manage earnings upward.Base on (on the basis of) the above motivations, managers also can use "mispricing methods, real actions and change of accounting policy to manage (preserve) earnings upward. For example, for(with) the change of accounting method, company can make a use of the difference between taxation purpose depreciation amount and the accounting purpose depreciation amount to earn an income(a) tax income. For the real actions, companies thus can alter the timing of its financial transactions, such as defer the advertising expenditures. Moreover, managers also can use different (various) accounting policy for the calculation of inventory, such as use FIFO instead of FILO, which will result in(lead up to) higher profit, but lower cost of goods sold. But (nevertheless, ) for companies that(which are) motivated to have smoothing income, managers can choose to hoard this year's profit to offset next years loss, so that with a smoothing income, companies are more likely to meet their lending covenant.Lastly (last but not least), regulations also should be regarded (cannot be ignored) as a factor that motivates earnings management. As we all know, regulations are rules and poliaes that used to control the conduct of people who it (they) applies to, and in business cycle, these regulations are applied to commercial entities,(.)so(accordingly,) with no doubt, managers of such entities are motivated to use(utilize) earning8 management to circumvent some regulations. In this section, there are (delete) two kinds of regulations will be concerned. The first one is industry regulations (Healy & Walhen 1999, p.377). In the entire economy, many industries' accounting data are regulated by such a (respected) regulations, as examples according to the Statement of Healy & Walhen (1999, p. 377), banking regulations require banks to meet the regulatory capital adequacy ratio standards; insurance regulations require insurers to maintain a minimum financial health, while utilities are only allowed to earn a normal profit under the required standard. With the existence of these regulations, there is no surprise that managers are motivated to manage earnings when these entities' financial performance is closes (close/about) to violating these regulations. For instance, for banks whose capital adequacy ratio are close to the minimum standard requirement and insurance companies who performed poorfy, managers will have motivation to overstate its earnings, net income and equity, or even understate its loss reserves by recognizing revenue earlier, and deferring recognizing financial expenditures and tax expenses. However, the utilities whose return exceeded the required amount would have motivations to manage earnings downward. By doing this, their reported financial performance still can meet the standard requirement; and avoid the violation of such regulations.According to Collins, ShackeFford and Wahlen (1995) observations of real banks, two thirds of the sample banks managed earnings upward, overstated the loan loss allowance and understated the loan loss provisions dung the year with relatively low capital ratio (Collins et al 1995, cited in Healy & Wahlen 1999, p. 378). Adiel (1996, p.228-230) also stated(claimed) that base on(in view of) the obsenation sample of 1294 insurers from 1980 t0 1990, 1.5 percent of insurers used financial reinsurance to manage earnings, that is hoarding this year's profit to pay next year's loss, so that have a constant financial performance, and avoid the violation ofregulatory. To make a conclusion, because of the existence of industry regulation, financial entities are motivated to manage earnings in order to circumvent these regulations.Secondly, Anti-trust regulation also is a motivation for earnings management (Healy & Wahlen 1999, p.378). Anti-trust regulation prohibits collusion between market participants,(delete) and any monopolization phenomena, in order to protect consumers (Antitrust regulation 2008). Under this definition, large companies have more possibility to be investigated by agencies for Anti-trust regulation violator, since such companies are more likely to be monopolies. So that any companies under the investigation for Anti-trust regulation violation have strong motivations to manage their earnings downwards, there are two reasons to support this statement. Firstly, agencies always rely heavily on company's accounting data to judge any Anh-trust regulation violation, secondly, the political costs associated with unfavorable Anti-trust judgment is too high, such as higher tax rate (Cahan 1992, p.80). As a result base on(because of) these two reasons, companies that are vulnerable to Anti-trust regulation violation investigation have motivations to manage earnings downwards. Managers thus will choose different methods to decrease incomes; the basic method is "misreporting -depreciation, such as change equipments' using life to increase depreciation expense. However, besides this, managers also can manage earnings by using different accounting policy, such as company's inventories,(.) Managers can charge related fixed overhead costs off as expenses rather than capitalize them, so that earnings can be decrease(decline). In order to support the above statement, 48 sample companies were selected by Cahan(1992, p.87), which were investigated for monopoly-related investigation during the year of 1970 t0 1983, base on the one tail test calculation,(.) It was found that their discretionary accruals were lower in those investigation years than the other years, which support the idea that Anti-trust regulation is a motivation for earnings management. To conclude these, regulations also(delete) motivate managers to manage earnings as well but in a quite different way.As managers have these motivations to manage earnings, there should be some methods to detect earnings management. The empirical one is by using total accruals.Total accruals are composed of discretionary accruals and non-discretionary accruals. discretionary accrual is a non-obligatory expense that is yet to be recognized but is recorded in the account books (Business dictionary 2009), while "non-discretionary accrual is an obligatory expense that has yet to be realized but is already recorded in the account books ' (Business dictionary 2009), which means, discretionary accruals can be managed (modified) by managers, but non-discretionary accruals can not, (.) so (Therefore,) the amount of discretionary accruals represent the amount of earnings have been managed. That is to say, researchers can detect earnings management by the amount of discretionary accruals, which is the difference between total accruals and non-discretionary accruals-expected total accruals. Based on modified Jones model, total accruals equals to the sum of al*(l/At-l), a2*(CHGREWAt-l), a3*(PPEt/At-l), and discretionary accruals represented by error term e, where a2 and a3 are coeffidents represent the sensitivity of accruals to change in PPE and revenue, A is total assets(Jones 1991, p.211). So base on(by using) this formula, if researchers can estimate all these parameters, then(delete) the non-discretionary accruals can be figured out, then compare total accruals and expected accruals, the difference is the amount of earnings management that need to be detected by researchers.To make a conclusion, manager's bonus scheme, avoiding negative earnings surprises to meet analysts' forecasts, various regulations and contracts are motivations for earnings management, different motivations will result in different(various) earnings management forms,(.) Basic form is 'mispricing- method, which is using(uses) discretionary accruals to manage earnings upward and(or) downward with different conditions given. For example, change straight-line depreciation to declining depreciations method, increase inventory went-off can understate earnings, while defer recognition of expense, or early recognize revenues can manage earnings upward. Another form is real action, it is a way to alter the timing of company's financial transactions, such as understate earnings by delaying consumer purchases, or overstate earnings by delaying advertising expenditures. Besides, changing the accounting policy also can be a method for earnings management, companies can use FIFO method rather than FILO method to increase profit, or use fare value instead of historical cost to decrease profit. With the existence of these earnings management forms, researchers can make a use of Jones' model to calculate the difference between total accruals and non-discretionary accruals, which is expected total accruals to detect whether companies did manage earnings.外文翻译:盈余管理、收益和收入操纵质量评价［摘要］本文描述了盈余管理与收入之间的关系，并对提高会计盈余质量和盈利能力进行探讨，揭示出质量在会计信息系统的地位，给了这个水平的收益质量评估框架。

上市公司经营业绩与盈余管理【外文翻译】

外文翻译原文Post-IPO Operating Performance and Earnings ManagementMaterial Source: International Business Research Author:Nurwati A. Ahmad-ZalukiThe present study investigates the operating performance and the existence of earnings management for a sample of 254 Malaysian IPO companies over the period 1990-2000. Using accrual-based measure of operating performance, this study finds strong evidence of declining performance in the IPO year and up to three years following IPOs relative to the pre-IPO period. This finding is consistent with the results of prior studies documenting the long run underperformance of IPO companies. The results also confirm that the decline in post-IPO operating performance is due to the existence of earnings manipulation by the IPO manager at the time of going public.Existing international studies of initial public offering (IPO) companies find that operating performance had declined in the post-IPO period. The majority of prior studies are based on the accrual measure of accounting profits which are potentially subject to accounting manipulation by managers, for example through working capital adjustments. The most recent study of operating performance of Malaysian IPO companies was undertaken by Ahmad and Lim using a sample of 162 IPO companies during the period 1996 to 2000. Using the accrual-based operating performance measure, they found that there was a significant decline in the operating performance after the companies went public. They also found that only company size and pre-IPO profitability have significant influences on the post-IPO operating performance. Due to the fact that the Malaysian economy suffered an economic crisis in 1997 and 1998, with most companies suffering a decline in profitability (Note 1), the present study addresses the earnings management issue and re-examines the robustness of existing Malaysian evidence by using a larger sample (254 companies) and a longer time period (1990-2000). First, it investigates long run operating performance in a developing market whereasmost prior research had focused on developed markets. Second, it extends prior operating performance literature by investigating the existence of earnings management at the time of the IPO. This will enable the assessment as to whether the post-IPO performance is potentially related to the reversal of pre-IPO accruals. Third, in addition to the post-IPO vs. pre-IPO comparison made in prior studies to discover whether there is a change in operating performance following IPOs, the timing of changes in performance is also identified by comparing year-to-year performance. Finally, the sample is large and incorporates both private IPOs and privatization IPOs, so it is more likely to be representative of the population of IPOs in the Malaysian market. (Note 2) In addition, a longer time period for the sample is used; therefore the results are not time period or crisis event specific. The results provide evidence of deterioration in operating performance of IPO companies relative to matching companies following IPOs. Further investigation shows that earnings management exists at the time of IPOs.In general, most of these studies find poor operating performance in the post-IPO period. The first study that examines the operating performance of IPO companies is undertaken by Jain and Kini (1994). They analyses the change in operating performance of 682 IPO companies in the US for the period 1976 to 1988. They find a significant decline in both operating performance measures for a period of three to five years subsequent to the IPO relative to the one-year pre-IPO level performance, both before and after industry adjustment. They argue that the declining operating performance in the post-IPO period cannot be attributed to a decline in business activity such as lack of growth in sales or cutbacks in post-IPO capital expenditure. This is because they also find that their sample of IPO companies displayed strong growth in sales and capital expenditure following the IPOs. Similar results are also found by Chan et al. (2003) for Chinese IPO companies. Theo et al. (1998), while mainly focusing on earnings management and long run share price performance in the US, also provide evidence on the time-series distribution of accounting performance. They find that the median return on assets is significantly positive in year 0 but then declines, to be significantly negative, by year four. The observed decline in the operating performance of IPO companies in general may not be too surprising. As pointed out by Jain and Kini (1994), managers may time their issues to follow periods of extraordinarily good performance. Investors may be overly optimistic about their companies' future performance based on the performance observed at the time of the IPO. Managers take advantage of thisovervaluation by issuing equity when their equity is ‘overvalued’, thereby reducing their overall cost of equity. As a result of the ‘over optimism’ hypothesis, Jain and Kini (1994) argue that IPOs are followed by significant declines in operating performance. The earnings management hypothesis also suggests a potential explanation for poor post-IPO performance. According to this hypothesis, investors may overvalue new issues because of misinterpreted high earnings reported at the time of offerings, and that they fail to realise that the earnings management symbolises a transitory increase in earnings (Theo et al., 1998). Therefore, investors are likely to be disappointed by the declining post-IPO operating performance and adjust their valuation downwards, which in turn causes the poor stock market performance.Data were collected from various sources. Pre-IPO data were hand-collected from the offering prospectuses. The data were then cross-checked with the first published annual reports of the newly-listed companies which show comparative figures for the pre-IPO year and IPO year (immediately before and after listing). Post-IPO data were collected from different sources including DataStream, the Pacific-Basin Capital Markets database, and the annual reports of the companies obtained from the Bursa Malaysia website at .my and the Public Information Centre of Bursa Malaysia.Various measures of operating performance are used to check the robustness of the results, using the accrual-based accounting profit approach: operating income on operating assets and operating income on sales.The operating income variables are all measured before taxes to avoid the effect of tax rate changes imposed by the Malaysian government during the period of analysis.The choice of the denominator is contentious.Barber and Lyon suggest that total assets reflect both operating and non-operating assets, so may understate the true productivity of operating assets. The market value of assets is not used because market value data for IPO companies are not available prior to going public. Companies that have recently issued securities can experience a large increase in the book value of assets, but no immediate increase in operating profit or cash flows.The present study also predicts that managers are most likely to positively manipulate earnings at the time of IPOs in order to increase their offering proceeds and maintain a high market price after IPOs. Following Theo et al, (1998), among others, earnings management is measured using discretionary accruals. As argued by Duchamp et al. (2001), ‘accruals not only reflect the choice of accounting methodsbut also the effect of recognition timing for revenues and expenses, asset write-downs, and changes in accounting estima tes’ (p.376). Since managers have more discretion over. Short term than over long term accruals (Theo et al., 1998); this paper employs discretionary current accruals (DCA) to proxy for earnings management, as also used by Roosenboom et al. (2003) and Duchamp et al.This paper is the first detailed, large sample study of the long run operating performance and earnings management of Malaysian IPO companies, and covers the period 1990 to 2000. The main results of this study can be summarized as follows. First, comparison of pre- and post IPO accounting-based operating performance in terms of levels and changes provides some interesting findings. There is moderate evidence supporting the view that the average IPO Company in Malaysia underperforms seasoned companies over the three year post-IPO period. However, there is strong evidence of declining performance in the IPO year and up to three years following the IPO. The year-to-year analysis reveals that the decline in performance is greatest in the year immediately following the IPO. This finding is consistent with the results of prior studies documenting the long run underperformance of IPOs. The results also confirm that the deterioration in the post-IPO operating performance is due to earnings management by IPO managers at the time of going public.译文上市公司经营业绩与盈余管理资料来源: 国际商务研究作者：Nurwati A. Ahmad-Zaluki 本次调查研究是以1990-2000年马来西亚245家IPO公司为样本，进行了盈余管理的实证研究。

股票期权奖励与盈余管理动机外文翻译

中文4200字外文翻译原文：Stock Option Compensation and EarningsManagement IncentivesThis study focuses on the relation between the structure of executive compensation and incentives to manage reported earnings. Specifically, we examine whether the use of stock options relative to other forms of pay influences discretionary accrual choices around option award dates. We conduct this study in part because of the apparent trend over the past two decades toward the use of options in executive pay. Compensation research has consistently shown that option awards, measured on a fair value basis, now represent on average the largest component of CEO pay (Murphy [1999]; Baker [1999]; Matsunaga [1995]; Yermack [1995]). Not surprisingly, this trend seems to have contributed to increased scrutiny of CEO pay and to have led directly to several public policy initiatives during the 1990s.For example, accounting standard setters adopted a series of rules that greatly expanded investor reporting requirements on options (SEC [1992, 1993]; FASB [1995]), and, in 1993, Congress enacted tax legislation intended to curb nonperformance-based executive pay (see Reitenga et al. [2002]; Perry and Zenner [2001]). Furthermore, as reported in the financial press, criticism of the magnitude of option awards, including criticism by investors, seems to occur regularly (e.g.Orwall [1997]; Jereski [1997]; Fox [2001]; Colvin [2001]). Standard setters and politicians are currently reexamining disclosure rules, offering evidence that options continue to be a difficult public policy issue (Schroeder [2001]; Hamburger and Whelan [2002]; WSJ [2002]).Until recently, academic research has typically focused on testing the use of options within an agency theory framework, primarily examining incentive alignment aspects. Arguably, by tying executive pay to stock price outcomes, options encourage managers to make operating and investing decisions that maximize shareholderwealth (Jensen and Meckling [1976]). Though results are mixed, the empirical evidence on options as a component of executive pay has generally supported such agency-based predictions. However, other studies document unexpected effects on the firm as well, including surprising evidence that awarding options can induce opportunistic behavior by management. The line of research most relevant for our study is one that suggests that managers manipulate the timing of news releases or option award dates (or both) as a means of increasing the fair value of their awards. For example, Aboody and Kasznik (2000) report evidence indicating that managers time the release of voluntary disclosures, both good and bad news, around award dates in order to increase the value of the options awarded. Since the exercise price of the option is typically set equal to the share price on award date, managers can conceivably increase their option compensation by releasing bad news before the award date. Consistent with this reasoning, Chauvin and Shenoy (2001) find that stock prices tend to decrease prior to option grants, while Yermack (1997) finds that stock prices tend to increase following option grants. The former effect would typically decrease the exercise price of the option at award date. The latter would increase the option's intrinsic value afterward.One way managers can influence the stock price of the firm is to manipulate reported performance (Subramanyam [1996]). We argue that the evidence in Aboody and Kasznik regarding voluntary disclosures in general implies that there could also be an incentive to manage reported earnings. We extend Aboody and Kasznik by examining whether option compensation creates incentives for CEOs to actively intervene not only in the timing of voluntary disclosure, but in the financial reporting process as well. We predict that managers receiving a relatively large portion of their compensation in the form of options will use discretionary accruals to report lower operating performance hoping to temporarily suppress stock prices.In addition to addressing the concerns of policymakers, our research is motivated by the fact that while a good deal of research has examined the role of bonus plans in motivating managers' self-interested behavior (e.g., Healy [1985]; Lambert and Larcker [1987]; Lewellen et al. [1987]; Gaver et al. [1995]; Holthausen et al. [1995];Reitenga et al. [2002]), relatively little published research investigates how stock option compensation influences such behavior. Our study could provide insight on whether standard option compensation practice influences the quality of reported earnings.To conduct our study, we examine compensation and firm performance data on 168 firms during the time period 1992-98. We obtain data from a variety of sources, including Compustat, the Wall Street Journal annual survey of executive compensation and proxy statements. We estimate a model of the discretionary accruals component of reported annual earnings as a function of several factors including (1) the ratio of option compensation to other forms of pay and (2) the timing of annual earnings announcements and award dates. As predicted, we find evidence that option awards influence the financial reporting process. Firms that compensate their executives with greater shares of options relative to other forms of pay appear to use discretionary accruals to decrease current earnings. Furthermore, this effect appears to be stronger if the executive announces earnings prior to an option award date. Our results extend previous research by documenting that managers appear to intervene in the financial reporting process in an attempt to increase the value of their awards.The rest of our paper is structured as follows. In Section 2, we develop our research hypotheses. Section 3 describes our research design, and Section 4 presents our main results and details on sensitivity tests. Finally, Section 5 discusses these results and their implications for executive compensation practices.Based on previous studies and our own review of proxy statements, it appears that the process of awarding options follows a standard pattern (Yermack [1997]; Aboody and Kasznik [2000]). Awards are formally determined by a compensation committee of the board of directors and are nearly always made once per year, typically with an exercise price equal to share price on award date.As noted in the introduction, most of the academic research on the use of stock options has used an agency theory framework, approaching the structure of executive pay as a solution to various agency problems. Early research such as DeFusco et al.(1990) and Yermack (1995) yielded mixed results, leaving significant unanswered questions about the prevalence of options. Perhaps because of better data availability, recent agency-based research has provided more consistent results. For example, studies by Core et al. (1999), Core and Guay (1999), and Bryan et al. (2000) appear to support the theory that executive pay structure in general, and the use of options in particular, reflects firms' agency costs.However, other lines of research on options indicate that executive compensation practices could produce unintended consequences for the firm. For example, Lambert et al. (1989) find that firms exhibit lower than predicted dividend payment levels after adopting executive stock option plans. Because the payoff on an option is determined by stock price appreciation rather than total shareholder return (appreciation plus dividends), dividend reduction increases option value. While apparently good for option-holding executives, such a dividend policy might not be fully anticipated by, or in the best interests of, shareholders. Pursuing a similar argument, Jolls (1996) finds that stock repurchases tend to replace cash dividends as executive option holdings increase. In addition, the line of research that we extend documents that manipulation of voluntary disclosures and/or award dates could increase the value of option compensation. Taken together, the evidence suggests that while option compensation practices are likely to mitigate some types of agency costs, the same practices might induce other forms of opportunistic behavior. We discuss these findings in more detail along with other relevant research on earnings management below.Prior research suggests that managers manipulate earnings to achieve a variety of objectives, including "income smoothing" (Gaver et al. [1995]; DeFond and Park [1997]), long-term bonus maximization (Healy [1985]), avoidance of technical default of debt covenants (Dichev and Skinner [2001]), and avoidance of losses and declines in earnings (Burgstahler and Dichev [1997]). Murphy (1999) suggests that option compensation and outright stock ownership by managers give rise to divergent incentives, with stock ownership focusing managers' efforts on achieving higher total shareholder returns and options rewarding only share price appreciation relative to the exercise price. Several empirical studies provide support for these predictions(Lambert et al. [1989]; Lewellen et al. [1987]). We conjecture that these divergent incentives could motivate managers to manipulate earnings up or down as a function of compensation structure and other factors.As an example, Matsunaga (1995) argues that, when firms are under financial distress, they attempt to reduce compensation expense by substituting options for bonus pay. Matsunaga also finds that income-increasing accounting policy choices are positively related to option awards. By extension, this result could imply a positive relation between income-increasing discretionary accruals and option compensation. However, Matsunaga examines only the associations between options and various financial characteristics of the firm, and his analysis does not directly examine any earnings management incentives related to option compensation.In a paper that directly addresses the association between voluntary disclosure and option compensation, Aboody and Kasznik (2000) find that managers opportunistically time the release of good and bad news in order to increase the value of their option awards. Their study provides evidence that managers receiving options prior to earnings announcements are more likely to issue preemptive "bad news" voluntary disclosures (as opposed to mandatory earnings announcements) prior to the option award. This evidence indicates that by positioning such disclosures in advance of an award date, managers in their sample are able to increase the value of option awards by an average of 16 percent. Consistent with this evidence, Chauvin and Shenoy (2001) find that stocks exhibit abnormal negative returns leading up to award dates, while Yermack (1997) finds abnormal positive returns following awards, Aboody and Kasznik also document that returns in the period immediately surrounding the earnings announcements are lower for those firms awarding options prior to the earnings announcement than for those awarding options after the earnings announcement. These results suggest that, all else equal, firms disclosing earnings prior to the award date might report lower earnings relative to those firms disclosing earnings after the award date.In contrast to Aboody and Kasznik (2000) and Chauvin and Shenoy (2001), Yermack (1997) concludes that the timing of an option award is conditional on thefavorability of earnings announcements. Specifically, managers tend to receive options prior to (after) the release of favorable (unfavorable) earnings announcements. The author interprets these results as evidence that managers benefit from opportunistic timing of option awards.Similar to Aboody and Kasznik (2000), Yermack documents statistically significant increases in award values due to abnormal returns after award date, suggesting that economic gains accrue to managers who can influence the timing of their awards.Note, however, that in all three of the above studies, the authors implicitly assume that reported earnings are exogenous. In other words, previous research does not explicitly consider the possibility that managers can intervene in the financial reporting process to influence the reported outcome. Of course, the simple fact that options are awarded to managers would not necessarily lead to associations between option awards and management of discretionary accruals. However, given that prior research suggests that managers use accounting discretion to accomplish a variety of earnings management objectives, we propose an effect from the use of options as follows. The relative magnitude of option compensation and CEO wealth effects documented by Aboody and Kasznik (2000), Chauvin and Shenoy (2001), and Yermack (1997) could give rise to incentives to not only manage disclosures or option award dates, but to influence reported earnings as well.ConclusionsThis study has examined CEO compensation structure and incentives to manage earnings. Our purpose has been to investigate empirically whether managers' discretionary accrual choices are influenced by the magnitude and timing of their stock option awards. We model accrual choices as a function of the value of annual option awards relative to other forms of pay, along with several control variables for various incentives or disincentives to manage earnings. Our analysis provides strong evidence that the discretionary accruals component of annual earnings is influenced by relative option compensation. Managers who receive large option awards appear to make income-decreasing accrual choices as a means of decreasing the exercise price of their awards. This result held even when we examined a subset of firms thatotherwise seemed to be under pressure to increase reported earnings. Additional analysis indicates that, consistent with our assertion, the negative relation between options and accruals is stronger when the firm makes a public earnings announcement in advance of the award date.Source: Terry Baker, Denton Collins, Austin Reitenga, 2003. “Stock Option Compensation and Earnings Management Incentives”. Journal of Accounting, Auditing and Finance, V ol.18, No.4, pp. 556-82.译文：股票期权奖励与盈余管理动机本课题集中于研究管理层薪资水平的结构和管理报告盈余的动机两者之间的关系。

上市公司的公司治理和盈余管理外文文献

European Journal of Scientific ResearchISSN 1450-216X Vol.26 No.4(2009), pp.624-638© EuroJournals Publishing, Inc. 2009/ejsr.htmCorporate Governance and Earnings Management an Empirical Evidence Form Pakistani Listed CompaniesSyed Zulfiqar Ali shahACMA, MBA, MS(Finance) Ph.D (Contd.) Mohammad Ali Jinnah UniversityAssistant Professor International Islamic UniversitySafdar Ali ButtDean Faculty of Management sciences and social SciencesMuhammad Ali Jinnah University IslamabadArshad HasanACMA, APA, MSc (Maths), MBA(IT), MS (Fin)Muhammad Ali Jinnah University IslamabadAbstractThe study examines the relationship between quality of Corporate Governance and Earnings Management. A set of listed Companies have been investigated to analyze therelationship for the year 2006. Quality has been measured by assigning weights to a set ofrelated variables whereas earnings management has been quantified by discretionaryaccruals. Modified Cross Sectional Jones Model has been used to determine theDiscretionary Accruals. Ordinary least square estimation indicates the presence of Positiverelationship between corporate governance and earnings management. Results appear unconventional, It may be due to the transition phase through which the Pakistani Companiesare passing after promulgation of code of corporate governance in 2002 which has created atendency to increase discretionary accruals as a risk averse measure.Keywords:Orporate Governance, Earnings Management,IntroductionBy the evolution of today’s modern business many of the corporations have become owned and controlled by families and the major agency problem exists not only between the management and owners in general, but between the management (the controlling family) and minority shareholders as well. Due to the increase in this conflict the issue of trust has taken the key position in today’s financial analysis procedures. Because management is accountable to shareholders and with in the business other stakeholders are also present and each stakeholder has his own interest in the business so, each one who is having any where any authority try to convert the results of that authority into his own favor. Earnings management is one of the examples which accountants by the will of authorities smoothen their earnings. Here a need has been assessed in the result of which concept of appropriate corporate governance emerged. In the continuation of which Securities and Exchange commission of Pakistan gave a code of Corporate Governance in March 02.Corporate Governance and Earnings Management an Empirical Evidence FormPakistani Listed Companies 625 Better governance is supposed to lead to better corporate performance by preventing the expropriation of controlling shareholders and ensuring better decision-making. This expropriation may be due to the result of smoothening of earning intention which is known as earnings management. This study attempts to assess that whether corporate governance creates any impact on earnings management or not.Good governance means little expropriation of corporate resources by managers or controlling shareholders, which contributes to better allocation of resources and better performance. As investors and lenders will be more willing to put their money in firms with good governance, they will face lower costs of capital, another source of better firm performance. Other stakeholders, including employees and suppliers, will also want to be associated with and enter into business relationships with such firms, as the relationships are likely to be more prosperous, fairer, and longer lasting than those with firms with less effective governance.Over the past two decades a number of prominent participants in the debates surrounding professional accounting and auditing standards have increased the attention given to the role of corporate governance procedures in financial reporting practices. Corporate governance is not just about the process by which elected representatives as directors make decisions. It is also about the way organizations are held accountable. The most obvious way is via financial reporting. A lot of financial reporting issues have remained under discussion in the financial literature, earnings management is one of them. Impact of corporate governance on earnings management is the core theme of this paper. Implicit in all of their recommendations is the assertion that the credibility of financial statement information is related to specific institutional features of corporate governance. The purpose of this paper will be to identify the empirical evidence that such a relation exists. Purpose is to find out correlation between different measures of earnings management and the composition of firms' boards of directors, particularly the subset of directors serving on the audit committee.In developing countries like Pakistan, more attention needs to be paid to the corporate governance issue. With most large corporations owned and controlled by families and with family members holding key managerial positions, however, the major agency problem exists not between the management and owners in general, but between the management (the controlling family) and minority shareholders. The existence of large shareholders may by itself not be a matter of concern, or may even be a blessing 6, but the beneficial effect of large shareholders should be expected only when management is separated from ownership or when proper corporate governance mechanisms are in place so that outside shareholders can effectively check misbehavior by controlling owners. These conditions are generally not met in most companies in Pakistan 7.Organization of the paper is in the way that first section contains introduction, second section contains work done by other people in the world on the issue, Data and methodology is presented in third section, fourth section contains Results and conclusion and in the last section references have been presented.Literature ReviewThis section has been distributed it in two parts, one is relevant to the work don eby other academicians and practitioners purely on corporate governance and financial reporting issues and in the other section different literatures relevant to earnings management have been presented.6Many empirical studies show that firms with large shareholders tend to perform better because they have strong incentive to closely monitor their firms and are thus less likely to suffer from the free-rider problem (Jensen and Meckling 1976; Shleifer and Vishny 1986, 1997).7The fact that controlling owners are typically preoccupied with conducting the managerial function themselves may be due to the perceived agency problem when management is separated (with limited transparency and disclosure, poor rule of law, and poor corporate governance) or to any potential rents expected from the managerial function.626 Syed Zulfiqar Ali shah, Safdar Ali Butt and Arshad Hasan Corporate Governance and Financial Reporting IssuesOne of the most important functions that corporate governance can play is in ensuring the quality of the financial reporting process. Levitt ( 1999) stated in a speech to directors, "the link between a company's directors and its financial reporting system has never been more crucial." Further, the Blue Ribbon Commission (1999) called for auditors to discuss with the audit committee the quality and not just the acceptability of the financial reporting alternatives.Corporate governance has received increasing emphasis both in practice and in academic research (e.g., Blue Ribbon Committee Report 1999; Ramsay Report 2001; Sarbanes-Oxley 2002; Bebchuk and Cohen 2004). This emphasis is due, in part, to the prevalence of highly publicized and egregious financial reporting frauds such as Enron, WorldCom, Aldelphia, and Parmalat, an unprecedented number of earnings restatements (Loomis 1999; Wu 2002; Palmrose and Scholz 2002; Larcker et al. 2004) and claims of blatant earnings manipulation by corporate management (Krugman 2002). Further, academic research has found an association between weaknesses in governance and poor financial reporting quality, earnings manipulation, financial statement fraud, and weaker internal controls (e.g., Dechow et al. 1996; Beasley 1996). Given these developments, there has been an emphasis on the need to improve corporate governance over the financial reporting process (Levitt 1998, 1999, 2000), such as enacting reforms to improve the effectiveness of the audit committee (Blue Ribbon Committee 1999; Sarbanes-Oxley Act 2002) and to make the board of directors and management more accountable for ensuring the integrity of the financial reports (SEC 2002, The Business Roundtable 2002) as well as a rapidly expanding of research on corporate governance.Investment decisions are based on information and the quicker and more reliable the information, the less likely it is that decisions will be made on emotion and herd instinct. This is in part due to the trust that investors on Wall Street have that the information underpinning their decisions is accurate and transparent, and that they get it at the same time as everyone else. This was not true of the Asian crisis, when the devaluation of the Thai bath set off investor reactions of panic and flight in response to growing knowledge about the deep cracks in the financial sectors. And it certainly was not true in Indonesia, where you had a situation in which, the more investors - - foreign and domestic - - learned about the problems within the economy; the bigger the crisis in confidence grew (Baird, 2000).Prior accounting research and the accounting profession have focused primarily on the board of directors and the audit committee. For instance, the Public Oversight Board (POB 1993) defined corporate governance as "those oversight activities undertaken by the board of directors and audit committee to ensure the integrity of the financial reporting process." However, a narrow view of corporate governance restricting it to only monitoring activities may potentially undervalue the role that corporate governance can play.Further, in a recent meta analysis of corporate governance research, Larcker et al. (2004, 1) conclude that "the typical structural indicators used in academic research and institutional rating services have very limited ability to explain managerial behavior and organizational performance." Thus, a more comprehensive framework should consider all major stakeholders in the governance mosaic, including those inside and outside the firm. For instance, the external auditor plays a significant role in monitoring financial reporting quality and hence can be viewed as an important participant in the governance process. We do not suggest that extant research has not looked at the role of the auditor but rather that the role of the auditor in the governance process is very complex as the auditor interacts with other stakeholders in the governance mosaic such as the audit committee and the management. In turn, the interplay among the stakeholders is affected by outside forces such as by regulators and stock exchanges as well as pressure to meet financial analysts. Further, the corporate governance mosaic suggests we need to look beyond much of the focus of current research in corporate governance that has concentrated on documenting associations and not causal relationships (Larcker et al. 2004) and to complement the current research by also investigating the substance of the interactions in the corporate governance arena. For example, although the emphasis in corporate governance research has been on looking at issues of independence, Cohen et al. (2002) document that unless management allows itself to be monitored the substance of governance activities will be subverted.Corporate Governance and Earnings Management an Empirical Evidence FormPakistani Listed Companies 627 Important thing is interrelationships between the various actors and mechanisms within the corporate governance mosaic. For example, the interactions among the audit committee, the external auditor, the internal auditor, the board, and the management are crucial to effective governance and to achieving high quality financial reporting (Sarbanes-Oxley Act 2002). An interview study with experienced auditors (Cohen et al. 2002) revealed that management has a significant influence over these parties. Some of the auditors in that study argue that if management does not want to be "governed", they can't be (Cohen et al. 2002 582). Further, management may place passive, compliant members on the board who may satisfy regulatory requirements but are reluctant to challenge management. For example, QWEST had no outside directors with experience in the company's core business. They also had a compensation committee that consistently awarded excessive bonuses to management in spite of the firm's relatively inferior performance (Business Week 2002).Other actors and mechanisms are largely external to the corporation, also influence its effective governance in significant ways and are integral to safeguarding the interest of a company's stakeholders. Examples of such actors include, but are not limited to, regulators, legislators, financial analysts, stock exchanges, courts and the legal system, and the stockholders. These external players often shape and influence the interactions among the actors who are more directly involved in the governance of the corporation. For instance, the Sarbanes-Oxley Act (2002) has significantly impacted all direct players in the corporate governance mosaic not only in terms of their role and function in the governance process but also in terms of how the players interact with one another. Under Sarbanes-Oxley, the audit committee now has the responsibility to hire and fire the auditor and to approve the non-audit services that the auditing firm can perform (SarbanesOxley Act 2002). Further, management must state that it has the responsibility for maintaining the internal control system and for evaluating its effectiveness (Geiger and Taylor 2003).' The actors in the governance process, highlights their potential interactions, and suggests that the governance process impacts the quality of financial reporting (e.g., transparency, objectivity) and, in the extreme, earnings manipulation and outright fraud.Although one should expect that "better" corporate governance leads to improved financial reporting, there is a lack of consensus as to what constitutes "financial reporting quality." For example, although Sarbanes-Oxley (2002) require auditors to discuss the quality of the financial reporting methods and not just their acceptability, the notion of financial reporting quality remains a vague concept. As Jonas and Blanchet (2000, 353) state, "in light of these new requirements, auditors, audit committee members, and management are now struggling to define " 'quality of financial reporting'."Rather than define "quality of financial reporting," prior literature has focused on factors such as earnings management, financial restatements, and fraud that clearly inhibit the attainment of high quality financial reports and have used the presence of these factors as evidence of a breakdown in the financial reporting process. Specifically, prior literature has examined the role of the various players in the governance mosaic (e.g., board, audit committees, external auditor, internal auditors) and the extent to which these players have either individually or collectively influenced the attainment of financial reports that are free from material misstatements and misrepresentations. The principal players identified in prior literature include the board of directors, the audit committee, the external auditor, and the internal auditors.The term “financial reporting” incorporates not only financial statements, but also includes other means of communicating financial and non-financial information, e.g. management forecast, stock exchange documents, etc. (SFAC N.1, 1978). Regarding the concept of “corporate governance” there is the problem of its definition due to the lack of consistent usage of the term (Keasey et al., 1997; Tricker, 2000). For the purposes of this paper “corporate governance” is defined as the system which deals with the wielding of power over corporate entities (Tricker, 1998), outlining the structures and processes associated with strategic decision-making and control within a corporation (Melis, 2004).628 Syed Zulfiqar Ali shah, Safdar Ali Butt and Arshad Hasan Whereas the financial reporting system is rather formal and institutionalized, the corporate governance system is relatively abstract and undefined. It is believed that the effectiveness of the systems of financial reporting and corporate governance is positively correlated (Melis 2002).On the one hand, financial reporting constitutes an important element of the corporate governance system. In fact, some failures of corporate governance may be reduced by an adequate financial reporting system. On the other hand, some problems of the financial reporting system find their origin in deficiencies of the system of corporate governance (Whittington, 1993).The key issue in understanding how their relationship is shaped is to analyze their theoretical roots. Disclosure may be considered the foundation of any system of corporate governance (Cadbury, 1999; Mallin, 2002). A system of corporate governance needs a good level of disclosure and an adequate information to eliminate (or at least reduce) information asymmetries between all parties in order to balance the powers of the corporate stakeholders, making corporate insiders accountable for their actions.Disclosure is also one of the fundamental goals of the financial reporting system (Melis 2004). Since Amaduzzi (1949) had been argued that financial statements (and the whole financial reporting system) are to be considered the result of a conflict of interests and balance of power between different stakeholders. The information disclosed by the financial statements describes what the corporate insiders want to be disclosed about the corporation’s activities and performance.In a recent research of corporate governance Melis (2004) indicated that if corporate insiders are unaccountable, or accountable only to some powerful stakeholders (e.g. a large creditor or a block holder), they will have the incentive to disclose only the information that is functional to those specific interests. If they are accountable only to some powerful stakeholders, they will draw up the financial statements according to the interests of the powerful stakeholder they are accountable to. It may therefore be argued that the financial reporting system needs an adequate balance of the corporate stakeholders’ powers to be able to give a true and fair view of the corporation to all strategic stakeholders. It also seems correct to argue that each system is influenced positively by the other one. The output produced by one system constitutes the input needed by the other and vice versa. Both of them pursue the accountability of the most powerful stakeholders towards the other legitimate stakeholders.The system of financial reporting may play a key role improving the soundness of the corporate governance system (Melis 2002). One of the key functions of the financial reporting system is to limit top management’s discretion, constraining top management to act in the shareholders’ interest (Jensen, Meckling, 1976; Watts, Zimmerman, 1978), or, in a wider perspective, in the interest of all the strategic corporate stakeholders. Making corporate insiders accountable is clearly also a key goal of any corporate governance system. The use of generally accepted accounting principles serves the need of a better quality of the information given by the financial statements and a consequent more effective accountability of the controlling agents (Pizzo, 2000).The institution of more and more detailed accounting principles and procedures limits the controlling agent’s discretion in the drawing up of the financial statements (Melis G., 1995).This may have a positive influence on the corporate governance system, since by controlling and manipulating the quality of corporate information disclosed in the financial statements, the dominant stakeholder (i.e. the one that effectively controls the corporation) would be able to influence the uncertainty attached to the estimates that shareholders (and, in general, all the strategic stakeholders) make of any given variable (Forker, 1992). By doing so, the dominant stakeholder would make monitoring procedures less effective, thus he/she would become less accountable to the other strategic stakeholders. The corporate governance system is affected by the degree of information asymmetries existing between the corporate stakeholders (Melis 2002).This is indeed one of the key functions of the financial reporting system (e.g. Accounting Standards Board, 1995), although an effective financial reporting system is only a necessary but not sufficient condition for a good corporate governance system.An effective financial reporting system is not sufficient to solve all the corporate governance problems, since corporate stakeholders may beCorporate Governance and Earnings Management an Empirical Evidence FormPakistani Listed Companies 629 unable (or may not have the incentive) to process the information given or even the “informed” stakeholder may not be able to exercise its monitoring because of high related costs (Whittington, 1993).Now question arises how the system of corporate governance may improve the quality of financial reporting? The system of corporate governance may play a key role in the improvement of the quality of the financial reporting system and corporate communication. Firstly, an effective corporate governance system is able to identify which are the strategic stakeholders to whom the financial reporting system should address the flow of information about the corporate activities. These stakeholders may be either corporate insiders or outsiders and have different information needs, according to the different role they have inside or outside the corporation (Coda, 1970; Terzani, 1995). For example, a shareholder may be interested in the ability of the corporation to remunerate his/her shares (via dividends or capital gains in the stock exchange market), while a creditor may want to be assured that capital is maintained intact so that the corporation will able to pay back its debts. An employee may have an interest to understand whether the corporation will be able to keep his/her job position or not. Despite the fact that in the long term all the different interests may converge in the overriding goal of value creation and corporation’s survival (Dezzani, 1981), in a shorter period different stakeholders may have different interests and informational needs. By identifying their needs, the corporate governance system makes the role of the financial reporting system more effective, improving the quality of corporate communication towards all the strategic stakeholders.Interest in audit committees as part of overall corporate governance has increased dramatically in recent years, with a specific emphasis on member independence, experience, and knowledge. Greater independent director experience and greater audit knowledge was associated with higher audit committee member support for an auditor who advocated a "substance over form" approach in the dispute with client management. Conversely, concurrent experience as a board director and a senior member of management was associated with increased support for management. (Deezort & Salterio, 2001)For all the above mentioned reasons, it seems correct to argue that a sound system of financial reporting, which produces a good quality of corporate communication by giving a true and fair view of the corporation, may have a positive influence on the effectiveness of the corporate governance system. However, the corporate governance system and the system of financial reporting are not characterized by a one way relationship. Not only does the financial reporting system may improve the corporate governance system, but it may also argued that the corporate governance system may have a positive influence on the quality of the corporate communication and the overall effectiveness of the financial reporting system.The Cadbury Report (1992) recommends the board of directors to pay a great attention to this issue, aiming for the highest level of disclosure. It is a corporate board’s duty to assure that the financial statements meet the spirit, not only the letter, of the true and fair view principle. A sound system of corporate governance seems necessary to achieve the purpose of the “true and fair view” given by the financial statements, and to improve the overall quality of the financial reporting system. However, it should also be taken into consideration that the quality of information produced by the financial reporting system is fundamental for a corporate governance system to be effective (Melis, 2004). The power of the most powerful corporate stakeholder can only be balanced if the other strategic stakeholders have the information they need to exercise their influence and hold the former accountable. Therefore, it seems correct to argue that the effectiveness of the systems of financial reporting and corporate governance is highly correlated, with any improvement in either system having a positive influence on the other, and vice versa.630 Syed Zulfiqar Ali shah, Safdar Ali Butt and Arshad Hasan Scoring Corporate Governance PracticesIn the literature different authors have used different criterias to score the corporate governance practices. For example, the corporate governance rankings by the investment bank Brunswick Warburg that Black (2000) uses are based on eight corporate governance elements with different weights: disclosure and transparency, dilution through share issuance, asset stripping and transfer pricing, dilution through a merger or restructuring, bankruptcy, limits on foreign ownership, management attitude toward shareholders, and registrar risk.Black, Jang, and Kim (2003) choose 42 items from 123 survey questions, excluding those asking management's views rather than facts, those irrelevant to corporate governance, those that are ambiguous as to whether they represent good or bad corporate governance, and those to which the answers vary little from firm to firm. They then classify the 42 items into four categories, each of which has an equal weight of 0.25: shareholders’ rights, board of directors in general, outside directors, and disclosure and transparency.The survey Klapper and Love (2002) use has a total of 57 questions with yes or no answers. They are classified into the following seven categories: discipline, transparency, independence, accountability, responsibility, fairness, and social awareness. Each category has a weight of 0.15 except for the last one, which has a weight of 0.10.Opinion surveys of professional investors may provide some guidance on the construction of corporate governance scores. McKinsey & Company's (2002) survey respondents say that for corporations, timely and broad disclosure is the highest priority, followed by independent boards, effective board practices, and performance-related compensation for directors and management.Investors' responses will, of course, reflect their major concerns given realities in particular regions or countries. A survey by PricewaterhouseCoopers Indonesia and the Jakarta Stock Exchange (2002) reports that what Indonesian institutional investors value most highly includes disclosure of related-party transactions and corporate governance practices. The existence of corporate governance codes and business ethics, as well as the quality and independence of external auditors, audit committees, and commissioners and directors, is also important. The existence of nomination and remuneration committees and the number of independent commissioners seem to be less essential for their investment decisions.Corporate governance practices may be determined by the scope and nature of associated agency problems (agency characteristics) of firms, that is, their need to attract external investment or external investors’ difficulties in monitoring the firms. As La Porta and others (1998) argue, good corporate governance is needed for better access to external financing at lower cost. This indicates that firms in need of a good deal of external financing, such as rapidly growing firms, have an incentive to improve their corporate governance. In addition, as Himmelberg, Hubbard, and Palia (1999) argue, firms facing large information asymmetry because of other characteristics of their firms may signal to the market their intent to protect investors better by adopting good corporate governance policies. This might be the case for large firms, young firms, or firms with relatively large intangible assets.However, as Klapper and Love (2002) find, the effect of CG on firm performance may vary depending on the country-specific level of investor protection. More specifically, firms with relatively good governance practices are likely to be more highly valued by investors in countries where investor protection is generally poor. Extending this argument, we may also expect the market to assess the same CG differently depending on corporations’ ownership and control structure. For instance, if the market suspects that controlling owners can find ways to maximize their interests at the expense of other shareholders however good their firms’ corporate governance practices may appear, then the market is likely to discount the value of measured CG.Earnings ManagementIn the literature, earnings management has been discussed under two point of views, According to Beidleman [1973] and Lipe [1990] earning management techniques reduce the variability of earnings。

关联交易下的盈余管理【外文翻译】

外文文献翻译Earnings Management through Affiliated Transactions Prior research has primarily tested for earnings management under the premise that the discretion allowed in recording accruals gives rise to earnings management behavior (Healy and Wahlen 1999). These studies have found evidence consistent with managers using discretionary accruals to report earnings in accordance with certain managerial incentives (e.g., avoid losses, maintain an earnings trend, meet analysts' forecasts, maximize bonuses, avoid debt covenants,minimize political costs, increase offering price, etc.).' We extend prior research by focusing on an additional source of earnings management. Besides accrual manipulations, firms may also engage in earnings management through transactions with affiliated companies. That is, instead of relying onthe judgment afforded by generally accepted accounting principles in recording accruals, a dominant company may use its influential relationship over an affiliated company to structure transactions between the two companies in a way that allows profits to be shifted from the affiliate to the dominant company. The dominant company reports higher profits and the affiliate reports lower profits, while the profitability of the economic entity as a whole remains unaffected. Since the value of the dominant company is directly linked to the profitability and well being of the entire economic entity, this type of earnings management may cause users of the dominant company's financial statements to be misled.There are several potential ways that companies could manage earnings using transactions with affiliated companies. Firms may engage in channel stuffing by forcing distributors to purchase higher than normal inventory levels, thus increasing the manufacturer's sales and profits for the current period. Firms could also manage earnings using transactions with less than wholly owned subsidiaries. Suppose a parent company sells inventory to a less than wholly owned subsidiary, which then sells the inventory to an external party in the same period. The increase inconsolidated earnings occurs because lower profits are shifted to minority shareholders. Firms may also manage earnings using affiliated transactions by either shifting profits across different tax jurisdictions (Emshwiller and Smith 2002), or using influence over suppliers (Butters 2001). Data on the effects of affiliated transactions, because of their very nature, are difficult to obtain.Transactions between the parent company and affiliates can affect the individual earnings of the companies within the group, but consolidated earnings remain generally unaffected. For example, the parent company can sell assets (e.g., inventory, land, etc.) to its subsidiary. The amount of the sale, as well as the timing of the sale, can be influenced by the parent due to its dominant position over the subsidiary. The parent company can report the sale and increased earnings in the current period. For consolidated purposes, the affiliated transaction will be eliminated and not affect the financial statements. The parent company could also enhance its earnings by shifting additional operating costs to subsidiaries. Total operating costs would be included in the consolidated reports but not in the parent's. The parent's significant influence over the subsidiary's dividend policy represents another method by which the parent company could improve parent earnings with no corresponding affect to consolidated earnings. Subsidiary-to-parent dividends increase parent earnings under the cost method, but these are excluded from consolidated earnings. The Japanese reporting environment allows for a pure match (i.e., same company) between parent and consolidated earnings. For each company, we can compare earnings management for stand-alone parent earnings plus affiliated transactions to earnings management for consolidated earnings excluding affiliated transactions.Consistent with prior research based on U.S. firms (e.g., Burgstahler and Dichev 1997; Degeorge et al. 1999; Payne and Robb 2000; Beatty et al. 2002; Beaver et al. 2003), both parent and consolidated earnings in Japan are managed at three important earnings thresholds: avoiding losses, avoiding earnings declines, and avoiding negative forecast errors. Consistent with expectations based on the ability to use affiliated transactions, parent earnings show greater evidence of earnings management than do consolidated earnings at each of these three earnings thresholds. Additionaltests indicate that the increased management of parent earnings around these three earnings thresholds is associated with the ability to use affiliated transactions. Investors and other financial statement users should be aware that, in addition to the use of discretionary accruals, firms may also manage earnings using transactions with affiliated companies.Prior research has focused almost exclusively on earnings management using accruals. This study brings attention to an additional source of earnings management: affiliated transactions. The ability of companies to manage earnings in this manner is largely unexplored in the literature. While we address this issue in a Japanese setting between parent and consolidated earnings, an important question for future research is: "To what extent do generally accepted accounting principles in other countries allow firms to use specific affiliated transactions (e.g., channel stuffing, transactions with less than wholly owned subsidiaries, shifting profits across tax jurisdictions, special purpose entities, influential relations over suppliers, etc.) to manage reported earnings?" This type of earnings management is not restricted to Japan, and likely occurs in many other jurisdictions as well. Since firm value is directly related to the value of the entire economic entity, understanding how companies enhance their reported performance by shifting profits within the economic entity is important to users of financial statements around the world.In examining whether managers engage in parent earnings management, it is useful first to consider whether earnings management through affiliated transactions can go undetected. If investors and other financial statement users are able to undo the management effects of affiliated transactions in parent earnings using information in consolidated earnings, then incentives to manage parent earnings, discussed later in this section, are weakened. However, in the Japanese business and reporting environment, it is unlikely that investors and others who contract with the firm will be able to easily detect earnings management using affiliated transactions. In the parent reports, the profitability of transactions with third parties and transactions with affiliates are not separately disclosed. Likewise, in the consolidated reports, the profitability of the parent company's third-party transactions is not separately reportedfrom the profitability of the affiliated companies' third-party transactions. Information on the profitability of individual affiliated companies may be unavailable if the affiliated company is wholly owned or not publicly traded. Affiliates may also have subsidiaries or equity investments, further complicating the assignment of profitability. The corporate group in Japan consists of a complex web of interlocking ownership, and multiple cross-holdings through subsidiaries are common. This type of corporate structure, combined with a lack of detailed disclosure, makes it difficult for financial statements users to determine the extent to which parent earnings are affected by affiliated transactions.Because of the undisclosed nature of affiliated transactions, we cannot directly compute the extent of affiliated transactions. In fact, the lack of disclosure on stand-alone parent or subsidiary earnings makes affiliated transactions a potentially useful earnings management technique.Due to its ambiguous meaning, the firm-specific difference between consolidated earnings and parent earnings is not used for any of our tests. Instead, we compare the distribution of parent earnings to the distribution of consolidated earnings as a means to detect earnings management. As discussed in more detail below, we expect the distribution of parent earnings to reveal more evidence of earnings management than will the distribution of consolidated earnings around important earnings thresholds, due at least in part to the availability of affiliated transactions to manage parent earnings. Our sample includes both parent and consolidated earnings for each firm to help control for differences in firm characteristics when comparing the distributions.Investors also seem to care about parent earnings, even though consolidated earnings are reported. Hall et al. (1994) report that stock returns have a similar or stronger relation with parent earnings than they do with consolidated earnings .This result conflicts with the notion that investors consider consolidated earnings to be a more complete measure of value. Herrmann et al. (2001) find that Japanese investors fixate on parent earnings and do not correctly consider the impact that consolidated earnings have on firm value. If managers are aware of investors' fixation on parent earnings, then managers may have stock-based incentives to meet investors'expectations of parent earnings.The incremental importance of parent earnings in Japan is further evident in financial analysts' forecasts. Financial analysts provide forecasts of both parent and consolidated earnings, indicating that investors demand the additional information found in parent earnings. Darrough and Harris (1991) examine whether forecasts of parent company and consolidated earnings in Japan convey information to investors. They find a greater association of unexpected security returns and unexpected earnings based on parent forecasts than consolidated forecasts. In private conversations with I/B/E/S personnel, we were told that the I/B/E/S database, while collecting data on both parent and consolidated earnings forecasts, provides forecast data for the earnings number (parent or consolidated) that is more frequently forecasted by analysts. For firms that report both parent and consolidated earnings during the 1994-2000 period, we find a total of 50,677 analyst/firm/year forecasts for parent earnings and 37,241 analyst/firm/year forecast for consolidated earnings. The priority analysts give to forecasting parent earnings creates an additional incentive for managers to report parent earnings consistent with earnings targets, regardless of the amount reported for consolidated earnings.While each of these variables potentially provides a noisy measure, all of them should correlate with the firm's ability to manage parent earnings through the use of affiliated transactions. Using multiple measures increases the confidence in the results by not over-relying on the outcome of a single variable. Also, agreement in results across the three variables provides additional assurance that the variables approximate the construct of interest, the firm's ability to manage parent earnings using affiliated transactions.Prior research clearly documents earnings management through the use of discretionary accruals. We extend the literature by investigating an additional source of earnings management transactions with affiliated companies. Companies can use a variety of affiliated transactions to manage earnings (e.g., channel stuffing, transactions with less than wholly owned subsidiaries, shifting profits across tax jurisdictions, special purpose entities, influential relations over suppliers, etc.) Toprovide a large cross-sectional test of earnings management using affiliated transactions, we employ a sample of Japanese firms. Under Japanese GAAP, parent earnings include the effects of affiliated transactions while consolidated earnings exclude the effects of affiliated transactions.We observe earnings management behavior around three earnings thresholds for both parent and consolidated earnings: avoiding losses, avoiding earnings declines, and avoiding negative forecast errors. Consistent with expectations based on transactions with affiliates, the distributions for parent earnings show substantially more evidence of earnings being managed at these thresholds. The percentage of firms that meet or exceed the threshold for parent performance and miss the threshold for consolidated performance is noticeably higher than the percentage of firms that meet or exceed the threshold for consolidated performance and miss it for parent performance. Additional tests indicate that earnings management around these three earnings thresholds is associated with the ability to use affiliated transactions for parent earnings, but not for consolidated earnings.Users of parent financial statements in general, and Japanese financial statements in particular, need to be aware that parent earnings based on the cost method for affiliates are likely managed to a greater degree than are consolidated earnings due to the impact of affiliated transactions. Future research can extend the results of this study to understand how financial reporting standards in other countries allow companies to manage earnings using transactions with affiliated companies.Consistent with additional earnings management through affiliated transactions, parent earnings show stronger evidence of earnings management than consolidated earnings at each of these three earnings thresholds. Further tests indicate that the increased management of parent earnings around these three earnings thresholds is related to the firm's ability to use affiliated transactions, while the management of consolidated earnings is unrelated to the firm's ability to use affiliated transactions.Finally, social disappointment for managers may be greater when parent earnings goals are not met because the failure can be reliably assigned to the management team. Since Japanese managers have more control over the operations of the parentcompany than they do over the consolidated entity, they may feel a greater responsibility to meet the income-reporting objectives of the parent company. Conversely, when the consolidated company fails to meet earnings goals, responsibility can more easily be shifted to other companies or circumstances. Therefore, even though consolidated earnings are reported, managers may evaluate themselves and be evaluated by others in the society based more on parent performance.Resource: Wayne B. Thomas, Donald R. Herrmann, and Tatsuo Inoue. Earning management through Affiliated Transactions．Journal of International Accounting Research, 2004:P1-25.译文：关联交易下的盈余管理先前的研究主要探测在谨慎性原则下，管理部门允许发生盈余管理行为(希利和瓦列1999)。

内部治理结构与盈余管理外文文献及翻译

内部治理结构与盈余管理本文探讨了公司的内部治理结构对盈余管理的约束作用。

这是假设盈余管理系统地涉及到公司内部治理机制的各个方面的前提下进行的研究，研究包括董事会的力量，审计委员会，内部审计职能的变化与外部审计师的选择四个方面。

基于横截面模型以2000年末在澳大利亚上市的434家公司为样本，将可控性应计利润作为衡量盈余管理的水平，发现董事会及审计委员会的非执行董事的人数越多盈余管理的可能性越低。

内部审计职能和审计机构的选择与盈余管理没有显著的相关性。

我们进一步分析还发现，利用收入的增加作为盈余管理的替代变量时，盈余管理和审计委员会的存在具有负相关关系。

关键词：审计委员会；公司治理；盈余管理；内部审计职能1 前言最近在澳大利亚及海外的操纵会计行为的案件表明公司治理机制的重要性，强有力的公司治理涉及到与公司绩效水平监测的一个适当的平衡(Cadbury,1997)。

在本论文中，我们以澳大利亚的公司治理为例探索治理机制与盈余之间的关系，因此，我们的重点是治理的监督作用。

我们研究的是独立的董事局（ShleiferandVishny，1997），独立委员会主席，一个有效的审计委员会（MenonandWilliams，1994年），内部审计（Clikeman，2003年）和外部审计师的选择使用（贝克尔埃塔尔，1998；弗朗西斯埃塔尔，1999）对盈余管理产生的影响。

在此之前的研究已经调查了治理机制可以减少欺诈性财务报告的产生（比斯利，1996; Dechowetal，1996年）。

这些研究认为有效的治理机制和真实的财务报告与违反一般公认会计原则（GAAP）呈负相关关系。

不过，相对较新的研究领域是公司治理与盈余管理。

Peasnell等（2000）研究表明盈余管理与董事会的独立性是负相关的，而另一些研究发现审计委员会与盈余管理之间存在显着的关系（Chtourouetal.2001; Xieetal，2001）。

澳大利亚公司内部治理结构和盈利管理实践检验是具有前提条件的，而Peasnell使用的数据主要是研究美国的。

盈余管理：一种普遍现象[外文翻译]

外文翻译Earnings Management：A Perspective Material Source: Managerial Finance Author:Messod D.Beneish AbstractAn issue central to accounting research is the extent to which managers alter reported earnings for their own benefit. In the 1970s and early 1980s, a large number of studies investigated the determinants of accounting choice. These studies provided evidence consistent with managers’ incentives to choose beneficial ways of reporting earnings in regulatory and contractual contexts (see Holthausen and Leftwich, 1983, and Watts and Zimmerman, 1986 for reviews of these studies). Since the mid-1980s studies of managerial incentives to alter earnings have focused primarily on accruals.I trace the explosive growth in accrual-based management research to three likely causes. First accruals are the principal product of Generally Accepted Accounting Principles and if earnings are managed it is more likely that the earnings management occurs on the accrual rather than the cash flow component of earnings. Second, studying accruals reduces the problems associated with the inability to measure the effect of various accounting choices on earnings (Watts and Zimmerman, 1990). Third，if earnings management is an unobservable component of accruals, it is less likely that investors can unravel the effect of earnings management on reported earnings.The main challenge faced by earnings management researchers is that academics, like investors, are unable to observe, or for that matter, measure the earnings management component of accruals. Indeed, managerial accounting actions intended to increase compensation, avoid covenant default, raise capital, or influence a regulatory outcome are largely unobservable. Consequently, prior work has drawn inferences from joint hypotheses that test both incentives to manage earnings as well as the construct validity of the various accrual models which are used to estimate managers’ accounting discretion. Because extant models of expected accruals provide imprecise estimates of managerial discretion, questions have been raised about whether the unobservable earnings management actions do in fact occur.Notwithstanding research design problems, a variety of evidence suggestive of earnings management has accumulated. In Section 2, I raise three general questions about earnings management: What is it? How frequently does it occur? How do researchers estimate earnings management? Prior investigations of managerial incentives to alter earnings typically fall in three categories, namely studies that examine the effect of contracts in accounting choices, and studies that examine the incentive effects associated with the need to raise external financing. Rather than discussing the evidence along those lines, I have chosen to present the evidence depending on the direction of the incentive context. Thus, I summarize in Sections 3 and 4, what is known about incentives to increase and decrease earnings. In Section 5, I discuss evidence on incentive contexts that provide incentives either to increase or to decrease earnings, and in Section 6, I present conclusions and suggestions for future work.2. Earnings Management2.1 DefinitionsNotice the plural: It reflects my view that academics have no consensus on what is earnings management. There have been at least three attempts at defining earnings management:(1) Managing earnings is “the process of taking deliberate steps within the constraints of generally accepted accounting principles to bring about a desired level of reported earnings.” (Davidso n, Stickney and Weil, 1987,cited in Schipper，1989).(2) Managing earnings is “a purposeful intervention in the external financial reporting process, with the intent of obtaining some private gain (as opposed to say，merely facilitating the neutral operati on of the process).” (Schipper, 1989).(3) “Earnings management occurs when managers use judgment in financial reporting and in structuring transactions to alter financial reports to either mislead some stakeholders about the underlying economic performance of the company or to influence contractual outcomes that depend on reported accounting numbers.” (Healy and Wahlen, 1999).A lack of consensus on the definition of earnings management implies differing interpretations of empirical evidence in studies that seek to detect earnings management，or to provide evidence of earnings management incentives. It is thus useful to compare the above three definitions.All three definitions deal with actions management undertaken within thecontext of financial reporting - including the structuring of transactions so that a desired accounting treatment applies (e.g. pooling, operating leases). However, the second definition also allows earnings management to occur via timing real investment and financing decisions. If the timing issue delays or accelerates a discretionary expenditure for a very short period of time around the firm’s fiscal year, I envision timing real decisions as a means of managing earnings. A problem with the second definition arises if readers interpret any real decisions - including those implying that managers forego profitable opportunities –as earnings management. Given the availability of alternative ways to manage earnings, I believe it is implausible to call earnings management a deviation from rational investment behavior. This reflects my view that earnings management is a financial reporting phenomenon.There are two perspectives on earnings management: the opportunistic perspective holds that managers seek to mislead investors, and the information perspective, first enunciated by Holthausen and Leftwich (1983), under which managerial discretion is a means for managers to reveal to investors their private expectations about the firm’s future cash flows. Much prior work has predicated its conclusions on an opportunistic perspective for earnings management and has not tested the information perspective.2.2 Incidence of earnings managementIf one believes former SEC Chairman Levitt (1998), earnings management is widespread, at least among public companies, as they face pressure to meet analysts’ expectations. Earnings management is also widespread if one relies on analytical arguments. For example, Bagnoli and Watts (2000) suggest that the existence of relative performance evaluation leads firms to manage earnings if they expect competitor firms to manage earnings. Similar prisoner’s dilemma-like arguments for the existence of earnings management appear in Erickson and Wang (1999) in the context of mergers and Shivakumar (2000) in the context of seasoned equity offerings.At the other extreme, we can only be certain that earnings have indeed been managed, when the judicial system, in cases that are brought by the SEC or the Department of Justice, resolves that earnings management has occurred. While it is likely that earnings management occurs more frequently than is observed from judicial actions, it is not clear to me that earnings management is pervasive: it seems implausible that firms face the same motivations to manage earnings over time. Aslater discussed, much of the evidence of earnings management is dependent on firm performance, suggesting that earnings management is more likely to be present when a firm’s performance is either unusually good or unusually bad.3. Evidence of Income Increasing Earnings ManagementI discuss four sources of incentives for income increasing earnings management:(1) debt contracts, (2) compensation agreements, (3) equity offerings, (4) insider trading. The first two sources have been hypothesized in prior positive accounting theory research and the last two sources are explicitly described as reasons behind earnings overstatement in the SEC’s accounting enforcement actions, and have been investigated in recent research.3.1 Debt CovenantsDebt contracts are an important theme in financial accounting research as lenders often use accounting numbers to regulate firms’ activities,e,g. by requiring that certain performance objectives be met or imposing limits to allowed investing and financing activities.The linkage between accounting numbers and debt contracts has been used in studies investigation (i) why economic consequences are observed when firms comply with mandated, or voluntarily make, accounting changes that have no cash flow impact，(ii) the determinants of accounting choice and managers’ exercise of discretion over accounting estimates that impact net income. The assumption is that debt covenants provide incentives for managers to increase earnings either to reduce the restrictiveness of accounting based constraints in debt agreements or to avoid the costs of covenant violations.The results of economic consequences studies have generally been mixed and researchers recently turned to investigating accounting choice in firms that experience actual technical default (Beneish and Press, 1993, 1995; Sweeney, 1994; Defond and Jiambalvo, 1994；and De Angelo, De Angelo and Skinner, 1994). The idea is to increase the power of the tests by focusing on a sample where the effect of violating debt covenants is likely to be more noticeable. While some of the evidence suggests that managers take income increasing actions delay the onset of default (Sweeney, 1994; Defond and Jiambalvo, 1994), other evidence does not (Beneish and Press,1993; DeAngelo,DeAngelo and Skinner,1994). Further, it is not clear such actions actually are sufficient to delay default. Thus, the evidence in these studies on whether managers make income increasing accounting choices to avoid default is mixed. However, examining a large sample of private debt agreements, andmeasuring firms’ closeness to current ratio and tangible net worth constraints, Dichev and Skinner (2000) find significantly greater proportions of firms slightly above the covenant’s violation threshold than below. They suggest that manag ers take actions consistent with avoiding covenant default.3.2 Compensation AgreementsStudies examining the bonus hypothesis (Healy, 1985；Gaveretal, 1995; and Holthausen, Larker and Sloan, 1995) provide evidence consistent with managers altering reported earnings to increase their compensation. Except for Healy (1985)，these studies provide evidence consistent with managers decreasing reported earnings to increase future compensation. In addition, Holthausen et al. (1995) finds little evidence that managers increase income and suggest that the income-increasing evidence in Healy (1985) is induced by his experimental design.3.3 Equity OfferingsA growing body of research examines managers’ incentives to increase reported income in the context of security offerings. Information asymmetry between owners-managers and investors, particularly at the time of initial public offerings, is recognized in prior research.Models such as Leland and Pyle (1977) suggest that the amount of equity retained by insiders signals their private valuation, and models such as Hughes (1986), Titman and Trueman (1986), and Datar et al. (1991) examine the role of the reputation of the auditor on the offer price. In these models, the asymmetry is resolved by the choice of an outside certifier or by a commitment to a contract that penalizes the issuer for untruthful disclosure. Empirical studies assume that information asymmetry remains and use various models to estimate managers’ exercise of discretion over accruals at the time of security offerings.Four studies investigate earnings management as an explanation for the puzzling behavior of post-issuance stock prices. Teoh, Welch and Rao (1998) and Teoh, Welch and Wong (1998a) study earnings management in the context of initial public offerings (IPO), and Rangan (1998) and Teoh, Welch and Wong (1998b) do so in the context of seasoned equity offerings. These studies estimate the extent of earnings management using Jones like models around the time of the security issuance, and correlate their earnings management estimates with post-issue earnings and returns. The evidence presented suggests that estimates of at-issue earnings management are significantly negatively correlated with subsequent earnings and returns performance. The results in these studies suggest that marketparticipants fail to understand the valuation implications of unexpected accruals. While the results are compelling, the conclusion that intentional earnings management at the time of security issuance successfully misleads investors is premature. Beneish (1998b, p.210) expresses reservations about generalizing such a conclusion as follows: “First, the conclusion implies that financial statement fraud is pervasive at the time of issuance. To explain; fraud is defined by the National Association of Certified Fraud Examiners (1993, p.6) as one or more intentional acts designed to deceive other persons and cause them financial loss." If financial statement fraud at issuance is pervasive - e.g. managers are successful in misleading investors. I would expect that firms would fare poorly post-issuance in terms of litigation brought about by the Securities and Exchange Commission (SEC), disgruntled investors, and the plaintiff’s bar. I would also expect managers to fare poorly post-issuance in terms of wealth and employment. I would find evidence of post-issue consequences on firms and managers informative about the existence of at-issue intentional earnings management to mislead investors and believe these issues are worthy of future research.译文盈余管理：一种普遍现象资料来源: 财务管理作者：Messod D. Beneish 摘要：会计研究的核心问题是在某种程度上管理者为了自己的利益而改变报表上的收入。

清算企业的盈余管理【外文翻译】

外文文献翻译原文：Earnings Management Using Discontinued Operations When making firm-valuation decisions, investors place a higher value on items of income expected to be persistent in the future. Presumably to aid users’ valuation decisions, GAAP generally requires that material nonrecurring items be separately disclosed in the financial statements. However, the separation of net income into recurring and nonrecurring components also gives managers the opportunity to mislead investors, by misclassifying income and expense items. For example, a manager wanting to increase firm valuation can misclassify recurring expenses as nonrecurring, misleading investors as to the persistence of the income increase. In the accounting literature, this type of earnings management is called classification shifting.McVay _2006_ discusses two reasons why classification shifting can be a relatively low-cost method for managing earnings. First, unlike accrual management or real activity manipulation, there is no “settling-up” in the f uture for past earnings management. If a manager decides to increase earnings using income-increasing accruals, then, at some point, these accruals must reverse. The reversal of these accruals reduces future reported earnings. If a manager decides to increase earnings by managing real activities, such as reducing research and development expenditures, then this likely leads to fewer income-producing projects and reduced earnings in the future. In contrast, classification shifting involves simply reporting recurring expenses in a nonrecurring classification on the income statement, having no implications for future earnings. Second,because classification shifting does not change net income, it is potentially subject to less scrutiny by auditors and regulators than forms of earnings management that change net income.Discontinued operations represent the income and cash flows of a portion of a company that has been _or will be_ discontinued from the continuing operations of the company. Under SFAS No. 144, the gain or loss for discontinued operations is comprised of three amounts. The first amount is the operating income or loss from theoperations of the component being discontinued for the entire year in which the decision to discontinue is made. The second amount is the gain or loss from disposal, which is the net amount realized over the carrying value of net assets of the component. The third amount is an impairment loss on the “assets held for sale” if the component is not disposed in the same year as the decision to discontinue.5 The results of discontinued operations are reported on the income statement as a separate item _net of tax effects_ after income from continuing operations. The “below the line” reporting of disposals as discontinued operations is likely perceived to be desirable for investors, because it communicates to them the results of a firm’s operations on a “with and without” basis. However, it could be detrimental to investors if managers use their reporting discretion to manage earnings when reporting discontinued operations. For example, managers could allocate normal operating expenses to discontinued operations in order to report increased income from continuing operations. Managers have discretion over the allocation of joint costs between continuing and discontinued operations, and this information is not normally available to external investors. It is doubtful that auditors would detect this manipulation during their analytical review because the company’s financial ratios would be sim ilar to what they were previously.The ability of asset disposals to be classified as discontinued operations has varied throughout time. Under APB Opinion No. 30 _APB 1973_, only dispositions of business “segments” were able to qualify for reporting as discontinued operations. In general, business segments were defined as a major line of business or a customer class. The FASB believed that investors would benefit from expanded application of the accounting and disclosure rules of discontinued operations and issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets _FASB 2001a_. SFAS No. 144 reduced the threshold for recognition of discontinued operations treatment by introducing the “component of an entity” concept. A component of an entity is distinguishable from the rest of the entity because it has its own clearly defined operations and cash flows. A component of an entity can be a reportable segment, an operating segment _as defined by SFAS No. 131, FASB 1997_, a reporting unit _as defined by SFAS No. 142, FASB 2001b_, a subsidiary, or an asset group. Thisreduction in the threshold for discontinued operations has allowed for more asset disposals to be classified as discontinued operations. Consequently, the FASB may have inadvertently given managers more discretion to manage earnings, potentially reducing the quality of reported earnings.In addition to the “component of an entity” requirement, SFAS No. 144 mandated two other requirements for an asset disposal to qualify for treatment as a discontinued operation. The first requirement is that the operations and cash flows of the component being disposed are completely separable from the seller’s continuing operations. The second requirement is that the seller has no significant involvement with the component after the sale. In theory, the application of these requirements appears straightforward; however, SFAS No. 144 did not clearly define the meaning of significant involvement. In practice, many asset disposals involve contractual terms: seller financing, retained equity by the seller, royalties paid to the seller by the buyer, service agreements, etc. The inclusion of these terms in the asset-disposal contract could be interpreted as significant involvement by the seller. In order to provide better guidance on the meaning of the term “significant involvement,” the FASB issued EITF 03-13 _FASB 2004_ as a guide for determining whether an entity retains significant involvement or receives cash flows. In short, if a firm receives material direct cash flows from the discontinued operations or maintains significant continuing involvement, then the disposal does not qualify as a discontinued operation. EITF 03-13 took effect in 2005 but could be adopted as early as 2004. It should be noted that, while the recognition criteria for discontinued operations are well defined in GAAP, the costs to be allocated to the discontinued operations are not. Accounting treatment for discontinued operations is also a global accounting issue. Similar to APB No. 30, IFRS 5, Non-Current Assets Held-for-Sale and Discontinued Operations _IASB 2004_ defines a discontinued operation as a separate major line of business or geographical area of operations. IFRS 5 also requires detailed disclosure of revenue, expenses, pre-tax profit or loss, and the related income tax expense, either in the notes or on the face of the income statement. Currently, both the FASB and the IASB are working toward a converged accounting definition and treatment for discontinued operations, with bothboards issuing proposals amending SFAS No. 144 and IFRS 5, respectively.In closing, material asset disposals are reported on the income statement as discontinued operations if they meet the requirements of SFAS No. 144 _or APB No.30 for disposals prior to 2002_ and likely reported as special items if they do not. Either income statement classification gives managers the opportunity to engage in classification shifting. Prior research provides evidence that special items are used for classification shifting. Since the recognition criteria for discontinued operations are better defined in the accounting standards than for special items, this may give managers less flexibility to manage earnings using classification shifting. For example, it may not be possible for managers to time the recognition of discontinued operations to coincide with a period during which earnings management is desired. Consequently, whether managers use discontinued operations for earnings management purposes is an empirical.Earnings management is one of the most studied areas in financial accounting research.Previous studies document that earnings management can be carried out through accrual management_e.g., Dechow et al.1995; Payne and Robb 2000_, real activity management _e.g., Dechow and Sloan 1991; Bushee 1998; Roychowdhury 2006_,8 or classification shifting _Ronen and Sadan 1975; Barnea et al. 1976; McVay 2006; Fan et al. 2010_. However, increasing current earnings using the former two methods has the potential of reducing future earnings. Since classification shifting simply moves certain revenues, expenses, gains, and losses to different line items on the income statement, it does not actually change net income. As a result, classification shifting is likely to be less costly and less scrutinized by auditors and regulators _Nelson et al. 2002_.9 Previous studies have largely focused on earnings management using accruals and real activity management. Relatively few studies have examined earnings management through classification shifting.Ronen and Sadan _1975_ contend that the dimensions and objects of income smoothing are closely associated. They also reason that, if the smoothing object is net income, then classification shifting is irrelevant. However, if the smoothing object is any income subtotal other than “bottomline”net income, then managers have anincentive to engage in classification shifting. This begs the question of which income subtotals interest investors. Lipe _1986_ documents that investors understand the future earnings implications between the different earnings components reported on the income statement. Bradshaw and Sloan _2002_ provide evidence of “street earnings” _i.e., modified-GAAP earnings with noncash and nonrecurring items excluded_ replacing GAAP earnings as one of the primary determinants of stock price. Together, these studies provide evidence of investors’ interest in recurring income subtotals rather than “bottom line” net income that includes nonrecurring items. If investors value recurring earnings higher than nonrecurring earnings, then managers have an incentive to misclassify operating expenses as nonrecurring expenses, to increase recurring income subtotals. Although one cannot observe which income statement subtotals investors use, we follow McVay _2006_ in assuming that core earnings is the managed subtotal. However, using discontinued operations to increase core earnings also increases income from continuing operations and other “above-the-line” earnings subtotals.One of the earliest studies in the area of classification shifting is Ronen and Sadan _1975_. They find evidence consistent with managers using extraordinary items to smooth earnings before extraordinary items. Barnea et al. _1976_ extend this line of research by providing evidence that managers also use extraordinary items to smooth operating income. Taken together, these studies provide evidence that managers are interested in managing multiple income statement subtotals, presumably because investors value various income statement subtotals differently. While the above studies provide evidence of earnings management using “below the line” income statement items, they do not examine the motivations behind classification shifting.Kinney and Trezevant _1997_ investigate whether managers use special items opportunistically to manage both earnings and investors’ perceptions. They find that income-decreasing special items are more likely to be reported as line items on the income statement, presumably to call attention to the transitory nature of the earnings decrease caused by these items. They also find that income-increasing special items are more likely to be reported in the footnotes to the financial statements, presumably toshift attention away from the transitory nature of the earnings increase caused by these items. Their findings suggest that managers behave opportunistically when disclosing special items. However, Riedl and Srinivasan _2010_ further examine managers’ reporting behavior regarding special items. They find that special items separately disclosed on the income statement have a lower persistence than special items disclosed in the financial statement footnotes. Their results are consistent with managers using financial statement presentation to assist investors in evaluating the persistence of special items. This evidence offers an alternative explanation for the managerial opportunism detected by Kinney and Trezevant _1997_.McVay _2006_ investigates whether managers engage in classification shifting, by reporting core expenses in income-decreasing special items. She uses an expectation model to separate core earnings, defined as operating income before depreciation and amortization, into expected and unexpected components. She finds special items are positively associated with contemporaneous unexpected core earnings and negatively associated with the unexpected change in future core earnings. These results are consistent with her hypothesis that managers shift operating expenses to special items. Sh e also provides evidence suggesting that managers’ motivation for classification shifting is to meet or beat analysts’ forecasts. In addition, she finds a negative stock price reaction to the reversal of unexpected core earnings, indicating that investors do not understand _or are not able to fully undo_ the earnings management. One drawback to the core earnings expectation model used by McVay _2006_ is the use of contemporaneous accruals _including accruals related to special items_ as a control for firm performance. The inclusion of special item accruals in the expectation model creates a potential bias in favor of her hypotheses. She acknowledges the reliance on an imperfect model is a limitation of her study.Fan et al. _2010_ extends McVay’s _2006_ co re earnings expectation models by controlling for performance using returns and lagged returns rather than contemporaneous accruals, thus eliminating any potential bias. They confirm McVay’s _2006_ findings that managers shift core expenses to income-decreasing special items. Using quarterly data, they find that classification shifting using income-decreasingspecial items is more prevalent in the fourth quarter than in other quarters. They also find that classification shifting is more prevalent when managers are constrained from using income-increasing accruals.Source:Michael Power. Fair value accounting, financial economics and the transformation of reliability[J]. Accounting and Business Research 2010.11(4) :197-210译文清算企业的盈余管理企业往往喜欢高估账面价值，吸引投资者对其投资。

中英文对照资产减值盈余管理

Earnings Management concerning the Impairment Decision: A quantitative empirical analysis of German listed companies between 2004 and 2009AbstractThis study investigates the determinants of the impairment decision of German listed companies between 2004 and 2009. We analyze the influence of economic factors and reporting incentives on this decision using a probit regression, reporting results for total impairments as well as separated by tangible and intangible asset impairments. We find strong evidence for a negative relationship between EBITDA as well as market to book ratio change and impairments, while intangible asset impairments show a positive relationship to operating cash flow. Additionally we find that for both tangible and intangible asset impairment income smoothing is an important determinant. Furthermore, intangible asset impairments are more probable in years of management changes.Keywords: impairment loss, impairment probability, earnings management, reportingincentive, income smoothing, management change, probit regression.EARNINGS MANAGEMENT CONCERNING THE IMPAIRMENT DECISION: A quantitative empirical analysis of German listed companies between 2004 and 20091 IntroductionIn this paper we investigate the determinants of the impairment decision of German listed companies.Despite the relatively strict regulations for the Impairment of Assets (IAS 36), managers still have a non-negligible discretion over the impairment decision. This results from the definition of the recoverable amount, which we will discuss in more detail at a later stage. Prior studies which mainly focus on the U.S.-American market find strong evidence for the existence of earnings management (i.e. income smoothing, big bath accounting, etc.) regarding the impairment decision as well as the respective magnitude. In our study we focus on the factors that influence the impairment decision only. We therefore examine the impairment behavior of German listed companies between 2004 and 2009. Excluding the years before mandatory IFRS adoption in 2005 does not change our findings (see section 5.3). In our study we assume that besides economic factors there are several other factors influencing a management‟s decision to write off, such as management incentives,, which were not incorporated in the regulations. As the decision to take an impairment is a dichotomous variable, we design our study using a probit regression.We find that the impairment decision regarding total impairments on long-termassets is influenced negatively by earnings before interest, taxes, depreciation and amortization (EBITDA) as well as market to book ratio, while it is positively influenced by firm size. Additionally, we find significant evidence for income smoothing. Factors like management changes and big bath accounting, which prior studies have found to have a significant influence on the decision to write off as well as on the magnitude of impairments , do not seem to influence the decision itself. Differentiating in tangible and intangible assets, we find that management changes play an important role in the intangible setting.We enrich the existing literature in two important ways. First we examine the impairment behavior at the German market. To our knowledge no research has been conducted on publicly listed companies in Germany. Models that were developed for the U.S.-American market could have less validity in the German setting. Regarding the national background, German companies are affected by a long history of principles like prudence (…Vorsichtsprinzip‟) and creditor protection(…Gläubigerschutz‟) (see Hoffmann (2010)) and thus may have another approach to the impairment decision. Secondly, we focus on the impairment decision and thus explicitly differentiate between those factors that influence the impairment decision and those that may have influence on the respective magnitude. One important technical distinction is that we use a panel analysis for our panel data, contrasting a lot of prior studies in which the panel data was pooled to conduct a cross-sectional analysis.The remainder of this paper is organized as follows. In section two we will give a brief overview of the underlying accounting regulations and of prior literature. Section three presents the hypotheses development. In section four we describe our research designselection. Section five reports our results and some sensitivity analysis, while section six concludes.2 Background2.1. Accounting for impairmentsAccording to IAS 36, a company has to evaluate for all assets annually if a triggering event has occurred, except for those that are explicitly excluded from the scope. If this is the case an impairment test has to be conducted. Besides, goodwill and intangible assets with an indefinite useful life have to be tested for impairment annually. If an impairment test has to be conducted, the carrying amount is compared with the recoverable amount, the latter being defined as the higher of fair value less costs to sell and value in use. The fair value less costs to sell has to be derived from an active market if this is possible. Alternatively, it can be calculated using a discounted cash flow approach. The value in use is defined as the present value of future cash flows. Discretion arises because in the vast majority of cases both value in use and fair value less costs to sell are calculated based on subjective estimates of either company internal or external cash flow predictions. Even though IAS 36 requires extensive disclosures on the parameters used to calculate the impairment losses, there mostly remains enough room for earnings management regarding the impairment decision, especially if the non-compliance with the disclosure requirements is takeninto consideration see Carlin, Finch (2008)).2.2 Prior researchIn this section we want to give a short overview on existing literature regarding the factors influencing the impairment of assets. We are aware that there has been an extensive amount of research conducted in this area and thus try to concentrate our literature review on the most influential studies which additionally use similar regression models as we do.Most of the prior literature examines the U.S.-American market and little research has been done which focuses on the impairment decision itself. Minnick (2004) examines the impairment decision from a corporate governance point of view, finding that there is a significant positive relationship between CEO turnover and the write-off probability. Additionally, she finds that the CEO compensation system is an important factor influencing the impairment decision process, and that companies with better governance are more likely to take a write-off and thus to rather show smaller amounts of impairment losses. Loh and Tan (2002) analyze macroeconomic and firm specific factors that influence the impairment decision of companies in Singapore. They find that the unemployment rate, the GDP growth rate, and the occupancy rate of properties and management changes are important determinants, whereas variables like the debt to asset ratio seem to be insignificant. Francis, Hanna and Vincent (1996) analyze the causes of discretionary asset write-offs ofU.S.-American companies before the adoption of SFAS 121 …Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of‟ and find significant evidence for the influence of management incentives, such as management changes, big bath accounting and income smoothing on the magnitude of impairments. Riedel (2004) compares the impairment characteristics ofU.S.-American companies before and after the adoption of SFAS 121. He finds that impairments were more closely related to management incentives and less closely related to economic effects after the change in accounting regulations. Among other things, he shows that there is a significant relationship between management changes as well as big bath accounting and the magnitude of impairment losses recognized. Beatty and Weber (2006) conduct a two-stage analysis estimating a joint probit and censored regression to analyze factors influencing the goodwill impairment decision and the respective magnitude in the SFAS 142 …Goodwill and other Intangible Assets‟ adoption period. They find that the impairment decision is influenced significantly by management reporting incentives like the existence of an earnings based bonus system, the manager‟s tenure, or the listing in an exchange with explicit delisting requirements affected by goodwill impairments. Cotter, Stokes and Wyatt (1998) investigate the determinants of the magnitude of asset write-offs of Australian companies focusing on management incentives. They find that an association between impairment magnitude and management incentives exists. They also find a relation to the amount of cash reserves, which they interpret as the capacity to write off. Garrod, Kosi and Valentincic (2008) analyze the impairment decision and magnitude of small privately held companies in Slovenia. They report that, in the absence of agency problems and in an environment with high alignment between financial and taxreporting, companies tend to manage earnings using current asset write-offs, whereas fixed asset impairments seem to be influenced mostly by regulatory factors.Taken together, these studies report that for large listed companies there do exist strong incentives to use the impairment decision and the respective magnitude to manage earnings and thereby influence stakeholders in a given direction, independent of the accounting standards that apply.3 Hypothesis Development3.1 Impairment decisionFrom our point of view, two different motivations influence the impairment decision of a company‟s management. First there are economic factors (e.g. earnings, cash flow) which should have significant influence. The counterparts are reporting incentives which can be either explicit or perceived. The significance that is ascribed to these factors varies depending on the research referred to. Rees, Gill and Gore (1996) find evidence for impairments reflecting a change in the company‟s economic environment, consistently Loh and Tan (2002) find the return on assets to be the most significant influence factor on the impairment decision. Other analyses reveal a strong relationship of reporting incentives and the impairment decision (e.g. Strong and Meyer (1087) find management changes to be an important determinant, Riedl (2004) finds evidence for the influence of big bath accounting as well as management changes on impairments and Beatty and Weber (2006) find that covenants, earnings based bonus payments, and CEO tenure as well as the listing on exchanges with financial-based listing requirements are determinants of the impairment decision). We assume that if there is not a reporting incentive calling for a different treatment, companies will take a write-off if economic factors appear to make it necessary.3.2 Economic factors influencing the impairment probabilityAccording to IAS 36, companies have to realize an impairment loss if the carrying amount of an asset exceeds its recoverable amount, the recoverable amount being calculated based on the expectations of either the market or the company. As these expectations are based on the actual economic situation of the company, we include different economic factors and related hypotheses in our analysis to reflect the necessity of realizing an impairment loss.Accounting regulations demand for the calculation of a net present value of the cash flows that can be generated by further use of the asset either by the company under consideration or by a third company, meaning that we would ideally need knowledge on the management‟s expectations of future performance. As these expectations are presumably based on today‟s knowledge, we include actual performance measures in our analysis. Thus our first proxy for the impairment probability is the actual cash flow from operations, which allows us to model the cash-related performance attributes:H1: Companies with a lower cash flow from operations have a higher impairmentprobability.Even though companies are obliged to base their impairment decision on estimated cash flows it is possible that companies which use earnings to control atleast certain assets will also base their impairment decision mainly onearnings-measures. To incorporate accrual-related performance attributes, too, we include earnings before impairments in our analysis, delivering our second hypothesis:H2: Companies with lower earnings before impairments have a higher impairmentprobability.As the necessity to realize an impairment loss follows from the relation of the market value to the carrying amount of the asset we would optimally need a measure for the relation of these two values. Unfortunately, no such measure is available on the asset or cash generating unit base. To proxy for this, we include the market to book ratio as well as its change from the prior year in our analysis, which leads to the next hypotheses:H3a: Companies with a lower market to book ratio have a higher impairment probability.H3b: Companies with a decreasing market to book ratio have a higher impairmentprobability.3.3 Reporting incentivesThe focus of our analysis lies on incentives which could lead the management to make a decision that does not in the first place follow from economic factors. This is what we call earnings management. The notion of earnings management is based on the assumption of asymmetric information. Managers can make accounting decisions independently of the economic situation if and only if the information necessary to undo earnings management is not publicly known (see Schipper (1989)). In the case of the impairment decision, we can assume that the respective information, namely the expected future cash flows, is not public. The shareholders‟ perception is one of the most important targets for the management as actual and potential shareholders are making the share price. Thus positively influencing their perception is probably one of the management‟s main incentives. One way to achieve this goal could be to manage the actual year‟s earnings p erformance. Following the extensive income smoothing literature, we assume that a good earnings performance is related with a high impairment probability. The idea behind this is that the management tries to meet the shareholders' expectations. According to Moses (1987), we can define income smoothing as an “effort to reduce fluctuations in reported earnings”, meaning that the management uses the impairment decision as …smoothing device‟ to reduce the divergence of reported earnings from an expected number. The income smoothing theory is based on the assumption that shareholders perceive actual earnings as a signal for future earnings, and that smoothed earnings allow for more precise forecasts which the capital market rewards with higher share prices. Consistently, Kasznik and McNichols (1999) report that even though financial analysts do not adjust their forecasts for companies that consecutively meet their expectations the market grants a market premium.Prior research has found that under certain circumstances income smoothing isalways worthwhile (see Trueman, Titman (1988)). Some empirical studies (e.g. Francis Hanna and Vincent (1996)) find significant evidence for the existence of income smoothing; other studies find that there is no such relationship (e.g. Riedl (2004)). We assume that managers apply income smoothing, meaning that impairments will be conducted in years with unexpected high income before impairments:H4: The management uses income smoothing to positively influence the shareholders’ perception.Closely related to the assumption of income smoothing is that of big bath accounting. Big bath accounting means that the management accumulates problems until it finally realizes a huge impairment loss in a year in which the company has realized an unexpectedly low income anyway. Following this approach offers several advantages (see Strong and Meyer (1987)). First the management in this way establishes a safety cushion for the next years in which it will be easier to meet the shareholders‟ expecta tions. Secondly, it is argued that realizing a large one time loss signals that past problems have been solved. The third advantage is a mere mathematical one: lowering earnings in the actual year ensures high earnings growth for the future. Another more psychological argument on which the big bath technique may be based is that if earnings are already small or negative, making the situation a little worse will in most cases do no harm, neither to management reputation nor to earnings expectations (see Walsh, Craig and Clarke (1991)). Thus we assume that managers apply big bath accounting, meaning that impairments will be conducted in years with unexpectedly low income before impairments:H5: The management uses big bath accounting to positively influence the shareholders’ perception.While H4 and H5 seem to be contradictory at first sight, Kirschenheiter and Melumad(2001) prove that if the reporting environment permits discretion the optimal strategy of management is to smooth income if good news occur and use big bath accounting if bad news occur.Another important target group of the management consists of actual as well as potential creditors. The relation to actual creditors is mainly based on the design of credit agreements. The leverage of the company under consideration influences these contracts in two ways. First the magnitude of borrowing costs is based on the assessment of financial risk for which the leverage is an important determinant, meaning that higher leverage can result in higher borrowing costs. Secondly, most credit agreements contain strict regulations concerning the leverage, called debt covenants. The breach of a given covenant can lead to an immediate repayment claim of the creditor which would result in extensive liquidity problems for most companies. Following the results of Duke and Hunt (1990), the leverage can be used to proxy for the closeness to debt covenant restrictions. Consistently, Sweeney (1994) provides evidence in support of the hypothesis that managers of firms approaching technical default respond with income-increasing accounting changes. Regarding the impairment decision, this means that the impairment probability decreases, deliveringour sixth hypothesis:H6: Companies with higher leverage have a lower impairment probability.In addition to the motivation to enhance the stakeholders‟ perception of the company, the management has different own motivations to manage earnings. First there are earnings based bonus payments. In most companies, management payment is divided in a fixed and a variable part where the latter has a short term and a long term oriented component. The short term component is commonly based on a measure of the company…s success, whereas the long term component contains a stock option plan. If impairment losses influence the figure standing for the success (e.g. EBIT, profit) we assume that the management has an incentive to delay impairments to later years. Consistently, Beatty and Weber (2006) find that bonus plans that do not explicitly exclude impairments reduce the impairment probability.H7: Companies that grant managers earnings based bonuses that are affected by impairmentshave a lower impairment probability. Another incentive that influences the impairment decision is a change in management. There are different reasons for incoming managers to realize impairment losses in their first year (see Wells (2002)), first of which is that they are not held responsible for past performance and thus may explicitly attribute the impairment losses to the preceding management. This is often referred to as …cleaning the decks‟, illustrating the fact that new managers tend to conduct impairments that have been delayed in prior years. This way it is possible to anticipate future losses without any loss of reputation, resulting in increasing earnings in subsequent years. As the year of the management change mostly is a partial year for the incoming manager, accounting income in that year is irrelevant to managerial compensation which is another reason to conduct impairments in exactly that year. The result of high impairments in the first year is that future years‟ income is relieved of these expenses so that an improving earnings trend can be reported from the first year of tenure on. Consistently,Moorje (1973) finds that companies with management changes show a significantly greater proportion of income reducing discretionary accounting decisions. A number of studies report the same result for the relationship of management changes and impairments (e.g. Riedl (2004), Francis, Hanna and Vincent (1996), Beatty and Weber (2006)), whereas others find no significant relationship (e.g. Cotter, Stokes and Wyatt (1998)).译文：有关减值盈余管理决策：定量的实证分析德国2004年至2009年上市公司摘要这项研究调查了2004年和2009年间德国上市公司减值的决定因素。

盈余管理与董事会角色会计学专业毕业设计外文文献翻译

外文翻译：盈余管理与董事会角色——以马来西亚公司为例马来西亚国民大学经济管理学院会计系 43600 班吉译文正文：摘要马来西亚公司引入公司治理守则来改善董事会，审计委员会和外聘审计的监控职能，这项研究从他们的盈余管理动机角度评估了一些董事会特征对于监控管理行为的作用，我们发现可操纵应计利润作为盈余管理的“代理人”是跟管理权负相关的的，同时，它又在控制大小、杠杆、性能以后与CEO-主席双重性正相关。

结果表明多个董事因素与盈余管理代理仅仅在负未管理盈利上是负相关的。

这说明多个董事因素对于检测盈余管理实践以避免损失是能起到积极作用的。

数据研究还证明独立董事成员比例在二双重地位方面对盈余管理作用不大。

1.概要在1997年亚洲金融危机以后，商界开始质疑公司治理机制在组织内部的作用。

继金融危机以后，两个有名的案例——2001年的安然事件和2002年的世通公司事件亦出现。

于是，很多人相信，现用的公司治理机制不足以通过盈余管理操作对管理者的效用最大化行为提供足够的控制作用。

为改善公司治理机制的监控作用，马来西亚公司于1999年起草了公司治理守则，并在随后的2000年得到财政部的认可。

该守则概述了一些董事会，审计委员会和外部审计师在维护股东的权益时在结构和运作过程中的必备条件。

这篇研究在马来西亚监管和商业环境下探讨董事会在减少盈余管理操作中的作用。

本文调查一些董事会特征并且评估这些特征是否与盈余管理操作相关。

与之前的研究相比，本文试图确定在何种程度上董事会可以限制在有双重角色地位的公司里盈余管理的发生率，而不讨论没有双重角色地位的公司情况。

在这里，我们采纳了黑利和沃伦（1999:368）对盈余管理的定义：“盈余管理是指管理者在财务报告和交易结构里使用判断来改变财务报告以达到误导一部分股东低估公司经济收益或者影响那些依靠报告的财务数据的合同结果之目的。

”在马来西亚，这方面的数据尚且匮乏。

放眼全球，也尚没有出版的探讨股东在监控主席——经理人盈余管理行为中作用的研究。

盈余管理的动机国外文献综述

盈余管理的动机国外文献综述一、引言盈余管理是指企业经理通过对财务报表数据的操控，更改企业财务报表数据，从而影响企业财务报告利润，最终影响企业信息外部使用者对企业的决策的行为。

Roychowdhury （2006年）通过解释盈余管理的目的而对盈余管理进行了定义。

经理人是被企业所雇佣的高级员工，他们必须尽力使股东对他们的经营成果满意；此外，企业管理人员也需要完成已经制定的财务目标。

为了实现以上的目标，企业管理人员往往会通过特殊手段进行盈余管理，这个手段实施的过程就是盈余管理。

关于企业管理层为什么进行盈余管理，国外学者各抒己见。

Watts和Zimmerman（1986年）明确指出有激励因素导致管理层进行盈余管理。

他们列明报酬契约、债务契约以及政治原因都是管理层进行盈余管理的动因。

Aharony等人（2000年）选取中国B股和H股的IPO公司作为样本，他们确认了在IPO公司当中存在着盈余管理现象。

Hunton等人（2006年），Libby和Kinney（2000年）指出企业管理层会为了满足财务分析师的预测而进行盈余管理，而这直接促成了企业股价的增长。

在此基础上，其他学者对盈余管理的动机进行了进一步的研究。

二、契约动机（一）债务契约Defond和Jiambalvo（1994年）以及Sweeney（1994年）论证了契约是盈余管理的动机之一。

Defond和Jiambalvo（1994年）通过对有债务契约的公司的研究，发现公司管理层会为了避免违反债务契约而进行盈余管理。

具体来说，那些有可能违反债务契约的公司的管理层会通过盈余管理来虚增企业财务报表的利润，由此避免因违反契约对企业造成的不良影响。

Sweeney（1994年）也阐述了盈余管理和债务契约之间存在联系。

研究表明，违约的公司更有可能进行盈余管理。

（二）报酬契约Holthausen等人（1995年）提出契约可以被视为盈余管理的动机之一。

报酬契约促使企业管理层进行盈余管理。

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外文文献翻译译文原文Earnings management and firm financial motive: A financialinvestigation of UK listed firmsAbstractThis study focuses on the investigation of motives for and characteristics of UK firms that engage in earnings management activities. It concentrates particularly on the provision of voluntary accounting disclosures, the violation of debt covenants, management compensation, and on the equity and debt capital needs of firms and their relation with the use of earnings management. The study examines also the earnings management inclination of firms that seek to meet or exceed financial analysts' forecasts. The findings generally indicate that firms with low profitability and high leverage measures are likely to use earnings management. Also, firms that are in equity and debt capital need and are close to debt covenant violation also appear to be inclined to employ earnings management practices. Likewise, firms tend to use earnings management to improve their financial numbers and subsequently reinforce their compensation and meet and exceed financial analysts' earnings forecasts. In contrast, the study shows that firms that provide voluntary accounting disclosures appear to be less inclined to make use of earnings management. 1．IntroductionIn their struggle to maximize firms' profits and stock value, managers may sometimes be inclined to make use of earnings management practices. This study examines whether firms employ earnings management procedures in order to improve their financial picture and impress stock market participants. The study seeks to identify motives for earnings management. Here, the study focuses on the relation between the provision of voluntary accounting disclosures, debt covenant violation, executive compensation, equity and debt capital, and financial analysts' forecasts, with earnings management.Earnings management relates to the use of discretionary accounting accruals to influence reported earnings. The implementation of such practices may be inspired by the appreciation that the stock market shows when favorable accounting numbers are reported. Sometimes, firms are inclined to disclose information that is in excess of what is required by the law. These voluntary disclosures aim mainly at improving firms' image and making it more appealing to investors. Hence, it follows that the provision of voluntary disclosures would probably reduce the scope for earnings management, since the provision of additional information would allow accounting users to detect phenomena of fraud, irregularity and shareholder misguidance.In order to avoid breaching debt covenants, which would negatively affect the company market picture and weaken the creditability and terms of borrowing, firms might resort to earnings management. Managers might also use earnings management techniques in order to enhance their compensation arrangements and wealth. In order to acquire the capital needed, a firm addresses the capital and money markets by issuing equity or debt capital. Firms might, therefore, engage in earnings management in order to impress capital providers and make the issues of stock and debt capital attractive and successful.Meeting or exceeding financial analysts' earnings forecasts is an absolute necessity, if a firm is to retain its status and prosperity. Indeed, Schonfeld (1998, pp. 256–257) states that ‘… If the company's actual earnings meet or just beat the consensus, both the company and the analysts win: The stock goes up, and everyone looks smart…Companies are under enormous pressure to achieve the consensus estimates, …’Therefore, firms seem to have a significant incentive to surmount or reach analysts' earnings expectations, a goal which might be achieved by employing earnings management practices.The study focuses on UK listed firms and examines whether there is a relation between earnings management and voluntary accounting disclosures, debt covenant violation, managers' compensation, equity and debt capital accessibility and meeting financial analysts' forecasts. The study also seeks to identify the financial characteristics of firms that use earnings management and the motives that urge themto resort to earnings management practices. The research question is whether firms that are in need of capital or in an unfavorable financial situation would employ earnings management in order to improve their financial numbers, and subsequently impress capital providers and other market participants.2.1. Voluntary accounting disclosuresManagers are inclined to provide voluntary accounting disclosures in order to inform stakeholders of their ability to meet business as well as financial targets. However, the in formativeness and the size of disclosed accounting information varies from firm to firm. Relative to its in formativeness, firms usually tend to disclose more willingly good information than bad information (Aboody and Kaznik, 2000). Managers tend to provide information in order to reduce variability in or influence the pricing of the company's stocks and consequently maximize their compensation receipts. Furthermore, voluntary disclosures can reduce potential political and contracting as well as litigation costs. Through voluntary accounting disclosures, managers could demonstrate to present and prospective stakeholders the company's superior financial position and also provide explanations when complicated and/or aggressive accounting methods are employed. Evidently, the provision of voluntary accounting disclosures can reduce information asymmetry and improve the communication between managers, shareholders and lenders. Financial analysts value firms that provide voluntary accounting disclosures higher than firms that disclose information based on the minimum requirements of the law, or firms that provide poor disclosures(Gelb and Zarowin, 2002). Good news forecasts may result in moderate increases in stock prices, while bad news forecasts may lead to large negative stock price changes (Hutton, Miller, & Skinner, 2003).2.2．Motives for earnings managementThe violation of debt covenants implies that there is volatility in major accounting measures, like earnings and liquidity, as well as the risk of bankruptcy may be high(DeFond and Jiambalvo,1994; Sweeney,1994). It also provides a negative signal of corporate performance with unfavorable implications for the company's stock behavior and creditability as well as for managers' reputation(Holthausen, Larcker, &Sloan, 1995). As a result, in an effort to avoid these undesirable effects and abide by their debt covenants, managers may be motivated to manage their accounting numbesr(Lambert, 2001). The extant literature suggests that managers tend to engage in earnings management to lessen the possibility of debt covenant violation. To this end, managers may use income-increasing discretionary accounting accruals(Sweeney, 1994).Due to the fact that executive compensation contracts are often based on reported accounting figures, managers may influence reported earnings in an effort to improve their reputation and compensation benefits(Hand and Skantz, 1998; Shuto, 2007). Managers with earnings-based compensation contracts tend to adopt income-increasing accounting methods to maximise their emoluments. When earnings drop below the lower bound or rise above the upper bound designated by the bonus plan, managers may be inclined to select income-decreasing accounting methods(Degeorge, Patel, & Zeckhauser, 1999). It is reported that managers may sometimes employ discretionary accruals in order to strengthen firm value rather than their managerial compensation. In certain cases, accounting-based executive contracts may lead managers to act in an opportunistic manner, whereby they adopt income-increasing policies that reinforce their compensation, even if they negatively affect shareholders' wealth. Actions that can be taken against managerial opportunism include a higher proportion of outsiders on the board, a strong audit committee closely inspecting the CEO, complying with accounting and auditing regulations that will ensure the independence of the auditing procedures, and reinforcing the investor protection mechanisms(Leuz, Nanda, & Wysocki, 2003; Ashbaugh-Skaife, Collins, & LaFond, 2006; Laux and Laux, 2008).3.1.Earnings management and voluntary accounting disclosuresIn their effort to inform stakeholders and soothe their concerns regarding the firm's future plans and viability, managers might voluntarily disclose pieces of qualitative and quantitative information beyond the minimum requirements of the law. The main objective of providing voluntary accounting disclosures would be to give clarifications and explanations to interested parties about the firm's financial pictureand performance and to vanish any doubts that might impede the firm's future financial growth and progress. The provision of informative accounting reports and the dissemination of good quality accounting information would arm stock market participants with insight and knowledge about the firm's financial performance and situation, and would subsequently tend to reduce the scope for earnings management. It follows, therefore, that firms that provide voluntary accounting disclosures would be less inclined to manage their earnings figures. The hypothesis that is tested is as follows.Firms that provide voluntary accounting disclosures are less likely to use earnings management.The categorization of firms into voluntary and non-voluntary accounting disclosers is based upon the quality and quantity of reported accounting information in published accounting reports. Firms that conform to the minimum requirements of the law and present basic accounting information, such as the basic financial statements and management reports as well as brief notes to the accounts with questionable informational value are labelled as non-voluntary accounting disclosers. Firms providing information more than required, including enlightening notes to the accounts, sensitive information regarding managers' remuneration, corporate governance, risk profile, debt covenants, use of financial derivatives as well as details about changes in accounting policies and their impact on accounting numbers, are labelled as voluntary accounting disclosers.3.2.Earnings management and debt covenant violationWhen contracting a loan agreement, lenders set conditions to borrowers, often regarding net worth and/or working capital. The violation of debt covenants would reflect the liquidity and/or profitability difficulties of the firm, and would unfavourably affect its reputation and creditability. Hence, managers might be inclined to engage in earnings management in order to comply with debt covenants set by lenders and reduce the possibility of violation and financial distress.3.3.Earnings management and equity and debt capitalFor a firm to reinforce its viability and fulfil its investment and growth plans, it has to make sure that it can obtain smooth access to equity and debt capital markets.To obtain unhindered access to capital markets and attract investors, a firm would need to display sound financial numbers and favorable future financial prospects. It appears therefore that, prior to an equity or debt issue, managers might use discretionary accruals in order to improve their firm financial performance and impress stock market participants, and thus make the issue attractive and successful. 3.4.Earnings management and executive compensationExecutive compensation varies depending on managers' financial performance, productivity and target meeting. Higher profitability and better financial measures would lead to higher compensation. In contrast, a failure to improve the firm's financial picture or attain the pre-set managerial goals would harm managers' reputation and adversely affect their remuneration. It follows, therefore, that managers might be inclined to influence their earnings figures by using discretionary accruals in order to favorably affect and maximise their compensation.3.5. Discretionary accruals and firm financial attributesThis section concludes the study by providing a general overview of the financial characteristics of firms with discretionary accruals. Firms with equity and/or debt capital needs, or firms that need to improve their accounting numbers and measures, such as profitability, liquidity and investment, as well as to reinforce their market financial picture might be inclined to use earnings management.4.Conclusionscapital markets. Similar considerations apply when firms seek to meet and exceed financial analysts' earnings forecasts. The study concludes that firms that engage in earnings management generally tend to display larger size, higher leverage, lower growth and inferior profitability and liquidity figures.Although earnings management may in some cases support (short-term) managerial objectives, it may also jeopardise firms' long-term integrity and credibility. Barsky (2002) argues that earnings management should be eliminated in order to achieve high level market quality and transparency. Although several measures have been recommended to reduce earnings management, such as regulation enactments, taxation threats, increased monitoring, external board participation, reinforcing auditcommittee role and internal control systems, etc, firms appear in certain cases to be inclined to resort to earnings management practices. Firms should seek to identify alternative means to achieve their managerial goals, even if they result in lower profitability figures. The disclosure of information that reflects their real financial picture would reinforce firms' credibility and access to capital markets and would also enhance their future financial prospects and prosperity.The findings of the study are useful for capital providers, such as investors and lenders, when they review firms' financial numbers and accounts and consider the approval or the rejection of firms' external financing requests. It follows that capital providers would be reluctant to provide financing to firms, whose financial characteristics and behaviour give rise to earnings management suspicions, such as disclosing poor financial information or information that simply abides by the minimum requirements of the law, being in or close to financial distress, reporting poor financial performance, etc. The study is also useful for regulatory and other market authorities, especially when they prepare or review accounting and financial regulation on reporting firm financial performance, and can give some insight in their effort to reduce the scope for earnings management and enhance the quality of the reported financial information.It is implied that the flexibility in financial reporting may in certain cases enhance the scope for judgement, subjectivity and earnings manipulation. It is a matter as to whether the stock market is sophisticated and insightful or not. It follows that the quality of accounting information is essential for enhancing the efficiency of the stock market. Hence, the questions that arise are how flexible financial reporting should be, and how accounting regulation should be improved to prevent and eliminate phenomena of earnings and investor manipulation. It stems that the information asymmetry may lead to opportunistic managerial behaviours, leading to a greater need to establish devices of monitoring managerial actions and decisions. The strengthening of accounting regulation, therefore, would lead to lower agency and monitoring costs and would improve the communication between managers and stakeholders. The reinforcement of the auditing and supervisory structure would alsoenable investors to make unbiased financial predictions about firms' future performance and make corporate reports credible and value relevant. Thus, the remedy for reducing earnings management would be the provision of higher quality accounting disclosures, which would allow firms to avoid political attention and scrutiny, or making stakeholders sceptical about the validity of their managerial actions.Source：Source: George kadrinis. Earnings management and firm financial motives: A financial investigation of UK listed firms[J].International review of financial analysis，2009(4)：164-173.译文:盈余管理与公司财务动机：英国上市公司的财务调查摘要本研究的重点是为英国上市公司的盈余管理动机，对其公司盈余管理活动的特点进行调查。

盈余管理与公司财务动机：英国上市公司的财务调查【外文翻译】

盈余管理的动机国外文献综述

德国公认会计准则与国际财务报告准则下的盈余管理【外文翻译】

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企业盈利质量分析中英文对照外文翻译文献

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上市公司经营业绩与盈余管理【外文翻译】

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关联交易下的盈余管理【外文翻译】

内部治理结构与盈余管理外文文献及翻译

盈余管理：一种普遍现象[外文翻译]

清算企业的盈余管理【外文翻译】

中英文对照 资产减值 盈余管理

盈余管理与董事会角色会计学专业毕业设计外文文献翻译

盈余管理的动机国外文献综述

中英文对照资产减值盈余管理