UM  > Faculty of Business Administration
The Effect of Earnings-Announcement Timing on Earnings Management
Mary L. Chai1; Samuel Tung
Conference Name2001 Hawaii Conference on Business
Source PublicationProceedings of the 2001 Hawaii Conference on Business
Conference DateJune 14-17, 2001
Conference PlaceHawaii, USA

This paper examines whether firms which delay earnings announcements engage in earnings management. The cross-sectional version of modified Jones 1995 model is used to estimate “normal” accruals. Prior research has documented that, on average, delayed earnings announcements are associated with negative earnings surprises. Our evidence suggests that the market anticipates unfavorable earnings news when it observes reporting delays. As a consequence, late reporters appear to make the most of a bad situation by employing income-decreasing accruals in big-bath-type earnings management and in contractual renegotiations. We find that the magnitude of incomereducing abnormal accruals is related to the reporting lag.

KeywordAccounting Accruals Big Bath Accounting Reporting Timeliness
Fulltext Access
Document TypeConference paper
CollectionFaculty of Business Administration
Affiliation1.Faculty of Business Administration, the University of Macau, P.O. Box 3001, Macau
2.Department of Accountancy and Law, the Hong Kong Baptist University, Kowloon, Hong Kong
First Author AffilicationFaculty of Business Administration
Recommended Citation
GB/T 7714
Mary L. Chai,Samuel Tung. The Effect of Earnings-Announcement Timing on Earnings Management[C],2001.
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