A Framework for the Classification of Accounts Manipulations

Stolowy, Hervé; Breton, Gaétan

doi:10.2139/ssrn.263290

Cited by 34 publications

(20 citation statements)

References 95 publications

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“…Using one of Copeland's typologies (1968, p.105), Stolowy and Breton (2000) identify three types of empirical tests for earnings manipulation: (1) directly ascertaining from management by interview, questionnaire, or observation; (2) asking other parties such as CPA's; or (3) examining financial statements and/or reports to governmental agencies to verify, ex post, if smoothing has occurred. Therefore, earnings management can be studied in two different ways.…”

Section: Sample and Methodsmentioning

confidence: 99%

Corporate governance and profit manipulation: a French field study

Lambert¹,

Sponem

2005

Critical Perspectives on Accounting

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Profit manipulation has been largely studied through Positive Accounting Theory (PAT). However, the weakness of the results obtained would suggest using different theoretical and methodological approaches to examine this subject. In France, management controllers play a central role in profit manipulation. This paper offers a comprehensive analysis of their profit manipulation practices. Using results from 32 interviews in 13 companies, we argue that the spread of Anglo-Saxon corporate governance model has fostered such behaviour. Far from the opportunism hypothesis supported by positive accounting theory, profit manipulation is used as a tool by management controllers to gain broader legitimacy within organizations and/or to adopt what they claim to be ethical behaviour.

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Section: Sample and Methodsmentioning

confidence: 99%

Corporate governance and profit manipulation: a French field study

Lambert¹,

Sponem

2005

Critical Perspectives on Accounting

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“…This discretion makes it easier for corporate executives to 'manage' the profit and loss statement (Stolowy and Breton, 2004;Cazavan-Jeny and Jeanjean, 2006). It should be noted that managerial latitude has not been curtailed, at least for intangibles, under French GAAP.…”

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confidence: 99%

Do IFRS provide better information about intangibles in Europe?

Sahut¹,

Boulerne

Teulon

2011

Review of Accounting and Finance

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Purpose -The purpose of this paper is to study the information content of intangible assets under IAS/IFRS when compared to Local GAAP for European listed companies. Design/methodology/approach -The paper employs multivariate regression models for a sample of 1855 European listed firms in a six-year period, from 2002 to 2004 in Local GAAP and from 2005 to 2007 in IAS/IFRS to investigate the empirical relationships between market value of European firms and book value of their intangible assets. Findings -The results suggest that the book value of other intangible assets of European listed firms is higher under IFRS than Local GAAP and has more informative value for explaining the price of the share and stock market returns. European investors, however, consider the financial information conveyed by capitalized goodwill to be less relevant under IFRS than with Local GAAP. Thus, identified intangible assets capitalized on European company balance sheets provide more value-relevant information for shareholders than unidentified intangible assets that have been transferred into goodwill, with the exception of Italian and Finnish investors. Originality/Value -The paper adds to the existing literature on IFRS by documenting the association between the market value of European listed firms and the book value of their goodwill and other intangibles assets. The study complements prior studies by demonstrating that country differences persist despite the use of common accounting standards and that Legal and regulatory country characteristics as well as market forces could still have a significant impact on the value relevance of accounting data.

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“…Since this case is free of moral hazard, and there is no asymmetry of information between the owners and management, we refer to it as the first-best case to distinguish it from the principal-agent scenario, henceforth referred to as the second-best. We find that the 1 An eagle view of the literature: For works that include reviews of the empirical evidence, see, for example, Ronen, Sadan, and Snow (1977), Ronen and Sadan (1981)], Schipper (1989), Healy and Wahlen (1999), Stolowy and Breton (2000), Beneish (2001), and Fields, Lys, and Vincent (2001)); for practitioners' views, see e.g., O'glove (1987), Pijper (1993), Schilit (1993), McBarnet and Whelan (1999), and Levitt (1998)); see also Scott (1997), andBelkaoui (1999). 2 Similarly, Beaver (1998, P.38) …”

Section: Statementioning

confidence: 90%

Valuation and Growth Rates Manipulation

2002

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Valuation requires the prediction of future growth rate of persistent earnings, which depend on past and present internal, unobservable, investment decisions. In this study, we investigate the "management" of the series of growth rates in a multi-period principal-agent model with a moral hazard problem between owners (the principal) and the manager (the agent). We find that the manager's choice of efforts might yield a series of increasing expected growth rates, contrary to owners' preferences. Consequently, the extrapolation of expected future earnings of an owner-controlled firm should differ from that of a management-controlled firm.

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A Framework for the Classification of Accounts Manipulations

Cited by 34 publications

References 95 publications

Corporate governance and profit manipulation: a French field study

Corporate governance and profit manipulation: a French field study

Do IFRS provide better information about intangibles in Europe?

Valuation and Growth Rates Manipulation

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