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Real earnings management: A review of the international literature
Author(s) -
Habib Ahsan,
Ranasinghe Dinithi,
Wu Julia Yonghua,
Biswas Pallab Kumar,
Ahmad Fawad
Publication year - 2022
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12968
Subject(s) - earnings management , corporate governance , context (archaeology) , audit , accounting , incentive , systematic review , economics , earnings , empirical research , business , finance , political science , microeconomics , paleontology , philosophy , medline , epistemology , law , biology
We provide a systematic literature review of the determinants and consequences of real earnings management (REM) in an international context. We provide a theoretical framework for REM, the development of REM measures, and review the determinants of REM, categorising these into financial reporting, auditing, governance and controls, capital market incentives, and regulatory determinants. We then review the empirical literature on the consequences of REM. We provide some suggestions for future research on measurement issues related to REM, and on filling gaps in the empirical research investigating its determinants and consequences.