Open AccessEarnings Management: Friend or Foe?
Author(s) -
Judith A. Laux
Publication year - 2011
Publication title -
journal of business and economics research
Language(s) - English
Resource type - Journals
eISSN - 2157-8893
pISSN - 1542-4448
DOI - 10.19030/jber.v1i11.3071
Subject(s) - earnings management , earnings , accounting , business , outcome (game theory) , earnings quality , quality (philosophy) , capital market , earnings response coefficient , economics , finance , accrual , microeconomics , philosophy , epistemology
This study looks at some of the recent literature on quality of earnings and earnings management and debates the propositions that earnings management (1) is not new, (2) is an expected outcome of a GAAP approach to accounting, and (3) is not necessarily detrimental to efficient capital markets. It also offers suggestions for using earnings management in a positive fashion to influence the future of the profession.