Publication:
Earnings quality in ex-post failed firms

Simple item page
dc.affiliation.dptoUC3M. Departamento de Economía de la Empresaes
dc.contributor.authorGarcía-Lara, Juan M.
dc.contributor.authorGarcía Osma, Beatriz
dc.contributor.authorNeophytou, Evi
dc.date.accessioned2011-10-26T18:17:03Z
dc.date.available2011-10-26T18:17:03Z
dc.date.issued2011-01-04
dc.description.abstractThis paper analyses earnings quality in ex-post failed firms. Using a large sample of UK bankrupt firms, we find that failed firms manage earnings upwards in the four years prior to failure. This manipulation is achieved in two ways: (1) through accounting (accruals) manipulation; and (2) by implementing real operating actions that deviate from normal practice. We show that these two types of manipulation lead to reduced earnings reliability. We use conditional conservatism as a proxy for reliability, as prior literature links conditional accounting conservatism to better governance and positive economic outcomes. Our results show that conditional conservatism decreases substantially in the years prior to failure. Finally, we show that accruals manipulation is more pronounced in ex-post bankrupt firms with low ex-ante probability of failure, and that ex-post bankrupt firms with high ex-ante failure probability, having likely exhausted the opportunities for accrual manipulation, manipulate real operations more aggressively
dc.description.sponsorshipEuropean Commission INTACCT Research Training Network (MRTNCT- 2006-035850), and the Spanish Ministry of Science and Innovation (ECO2008-0638/ECON and SEJ2007- 67582/ECON and SEJ2005-08644/ECO)
dc.description.statusPublicado
dc.format.mimetypeapplication/pdf
dc.identifier.bibliographicCitationAccounting and Business Research, 2009, v. 39, n. 2, pp. 119-138
dc.identifier.doi10.1080/00014788.2009.9663353
dc.identifier.issn0001-4788
dc.identifier.publicationfirstpage119
dc.identifier.publicationissue2
dc.identifier.publicationlastpage138
dc.identifier.publicationtitleAccounting and Business Research
dc.identifier.publicationvolume39
dc.identifier.urihttps://hdl.handle.net/10016/12413
dc.language.isoeng
dc.publisherTaylor & Francis
dc.relation.projectIDGobierno de España. ECO2008-0638/ECON
dc.relation.projectIDGobierno de España. SEJ2007-67582/ECON
dc.relation.projectIDGobierno de España. SEJ2005-08644/ECO
dc.relation.publisherversionhttp://dx.doi.org/10.1080/00014788.2009.9663353
dc.rights©Taylor & Francis
dc.rights.accessRightsopen access
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.ecienciaEmpresa
dc.subject.otherFirm failure
dc.subject.otherAccruals management
dc.subject.otherReal earnings management
dc.subject.otherConditional conservatism
dc.subject.otherEarnings quality
dc.subject.otherBankruptcy
dc.titleEarnings quality in ex-post failed firms
dc.typeresearch article*
dc.type.hasVersionAM*
dspace.entity.typePublication
Files
Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
earnings_garcialara_ABR_2011_ps.pdf
Size:
1.02 MB
Format:
Adobe Portable Document Format
Description:
Download
Collections
DEE - Artículos de Revistas
Economists Online