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Managerial discretion in distressed firms
16 references·16 citing·23 second hopsampled
Managerial discretion in distressed firms (2007)Managerial discretion in distressed firmsPerformance matched discretionary accrual measures (2005)Performance matched discretio…Earnings Manipulation in Failing Firms (2003)Earnings Manipulation in Fail…Earnings management and investor protection: an international comparison (2003)Earnings management and inves…Debtor-in-possession financing and bankruptcy resolution: Empirical evidence (2003)Debtor-in-possession financin…Large–Sample Evidence on the Debt Covenant Hypothesis (2002)Large–Sample Evidence on the …A Review of the Earnings Management Literature and Its Implications for Standard Setting (1999)A Review of the Earnings Mana…Earnings management and the underperformance of seasoned equity offerings11We thank Brad Barber (the referee), Randy Beatty, Vic Bernard, K.C. Chan, Kent Daniel, M. DeFond, Laura Field, David Heike, Chuan Yang Hwang, Jonathan Karpoff, S.P. Kothari, Charles Lee, Wayne Mikkelson (the editor), Tim Opler, Krishna Palepu, K. Ramesh, Jay Ritter, Terry Shevlin, Doug Skinner, Sheridan Titman, Ross Watts, Jerry Zimmerman, and seminar participants at the University of California Finance and Accounting Conference (Davis, March 1995), the NBER Corporate Finance Conference (Boston, August 1995), the Center for Research in Security Prices Seminar (Chicago, October 1995), the American Finance Association Conference (San Francisco, 1996), the American Accounting Association Conference (Chicago, August 1996), the University of Michigan, and the University of Rochester for helpful comments and discussions. (1998)Earnings management and the u…Earnings Management and the Long‐Run Market Performance of Initial Public Offerings (1998)Earnings Management and the L…Underpricing, ownership and control in initial public offerings of equity securities in the UK (1997)Underpricing, ownership and c…Debt-covenant violations and managers' accounting responses (1994)Debt-covenant violations and …Debt covenant violation and manipulation of accruals (1994)Debt covenant violation and m…Accounting choice in troubled companies (1994)Accounting choice in troubled…The Cross-Section of Expected Stock Returns (1992)The Cross-Section of Expected…Earnings Management During Import Relief Investigations (1991)Earnings Management During Im…Positive Accounting Theory (1985)Positive Accounting TheoryRisk, Return, and Equilibrium: Empirical Tests (1973)Risk, Return, and Equilibrium…Does top management team diversity affect accounting quality? Empirical evidence from Germany (2023)Does top management team dive…A literature survey of corporate failure prediction models (2023)A literature survey of corpor…Financial distress, earnings management and Big 4 auditors in emerging markets (2022)Financial distress, earnings …Do Auditors Respond to Clients’ Climate Change-related External Risks? Evidence from Audit Fees (2022)Do Auditors Respond to Client…Real earnings management in bankrupt firms (2021)Real earnings management in b…Earnings Management in Malaysian Companies during the Global Financial Crisis and the Coincidental Effect of IFRS Adoption (2019)Earnings Management in Malays…Accruals quality and the cost of debt: the European evidence (2019)Accruals quality and the cost…Forecasting Corporate Bankruptcy Using Accrual-Based Models (2017)Forecasting Corporate Bankrup…Do financially distressed firms misclassify core expenses? (2017)Do financially distressed fir…Accrual management as an indication of money laundering through legally registered Mafia firms in Italy (2017)Accrual management as an indi…Earnings Management before Bankruptcy: A Review of the Literature (2016)Earnings Management before Ba…Efficient contracting, earnings smoothing and managerial accounting discretion (2014)Efficient contracting, earnin…Earnings management among bankrupt non-listed firms: evidence from Spain (2014)Earnings management among ban…Integrity of financial information as a determinant of the outcome of a bankruptcy procedure (2013)Integrity of financial inform…Income smoothing behaviour by Asian transportation firms (2012)Income smoothing behaviour by…Hedging and earnings management in the light of IFRS implementation: Evidence from the UK stock market (2011)Hedging and earnings manageme…Corporate Forecasts of Earnings Per Share and Stock Price Behavior: Empirical Test (1976)Earnings Management through Real Activities Manipulation (2003)The effect of bonus schemes on accounting decisions (1985)CAPITAL ASSET PRICES: A THEORY OF MARKET EQUILIBRIUM UNDER CONDITIONS OF RISK* (1964)The Behavior of Stock-Market Prices (1965)THE VALUATION OF RISK ASSETS AND THE SELECTION OF RISKY INVESTMENTS IN STOCK PORTFOLIOS AND CAPITAL BUDGETS**This paper is another in a series of interrelated theoretical and statistical studies of corporate financial and investment policies being made under grants from the Rockefeller Foundation, and more recently the Ford Foundation, to the Harvard Business School. The generous support for this work is most gratefully acknowledged. The author is also much indebted to his colleagues Professors Bishop, Christenson, Kahr, Raiffa, and (especially) Schlaifer, for extensive discussion and commentary on an earlier draft of this paper; but responsibility for any errors or imperfections remains strictly his own.[Professor Sharpe's paper, “Capital Asset Prices: A Theory of Market Equilibrium Under Conditions of Risk” (Journal of Finance, September 1964) appeared after this paper was in final form and on its way to the printers. My first section, which parallels the first half of his paper (with corresponding conclusions), sets the algebraic framework for sections II, III and VI, (which have no counterpart in his paper) and for section IV on the equilibrium prices of risk assets, concerning which our results differ significantly for reasons which will be explored elsewhere. Sharpe does not take up the capital budgeting problem developed in section V below.] (1975)On Persistence in Mutual Fund Performance (1997)Common risk factors in the returns on stocks and bonds (1993)The Valuation of Risk Assets and the Selection of Risky Investments in Stock Portfolios and Capital Budgets (1965)Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency (1993)Illiquidity and stock returns: cross-section and time-series effects (2002)A Survey of Corporate Governance (1997)Law and Finance (1998)Corporate Ownership Around the World (1999)International Accounting Standards and Accounting Quality (2008)Understanding earnings quality: A review of the proxies, their determinants and their consequences (2010)Experimental and Quasi-Experimental Designs for Research (1963)A review of archival auditing research (2014)Causes and Consequences of Earnings Manipulation: An Analysis of Firms Subject to Enforcement Actions by the SEC* (1996)Earnings management to avoid earnings decreases and losses (1997)Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature (2001)The economic implications of corporate financial reporting (2005)Investor Psychology and Security Market Under‐ and Overreactions (1998)
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References

  • 1992The Cross-Section of Expected Stock Returns17,251 cited
  • 1973Risk, Return, and Equilibrium: Empirical Tests14,248 cited
  • 1991Earnings Management During Import Relief Investigations8,369 cited
  • 2005Performance matched discretionary accrual measures6,963 cited
  • 1985Positive Accounting Theory5,837 cited
  • 2003Earnings management and investor protection: an international comparison5,395 cited
  • 1999A Review of the Earnings Management Literature and Its Implications for Standard Setting4,637 cited
  • 1994Debt covenant violation and manipulation of accruals2,773 cited
  • 1998Earnings Management and the Long‐Run Market Performance of Initial Public Offerings2,300 cited
  • 1998Earnings management and the underperformance of seasoned equity offerings11We thank Brad Barber (the referee), Randy Beatty, Vic Bernard, K.C. Chan, Kent Daniel, M. DeFond, Laura Field, David Heike, Chuan Yang Hwang, Jonathan Karpoff, S.P. Kothari, Charles Lee, Wayne Mikkelson (the editor), Tim Opler, Krishna Palepu, K. Ramesh, Jay Ritter, Terry Shevlin, Doug Skinner, Sheridan Titman, Ross Watts, Jerry Zimmerman, and seminar participants at the University of California Finance and Accounting Conference (Davis, March 1995), the NBER Corporate Finance Conference (Boston, August 1995), the Center for Research in Security Prices Seminar (Chicago, October 1995), the American Finance Association Conference (San Francisco, 1996), the American Accounting Association Conference (Chicago, August 1996), the University of Michigan, and the University of Rochester for helpful comments and discussions.1,638 cited
  • 1994Debt-covenant violations and managers' accounting responses1,250 cited

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  • 2002Large–Sample Evidence on the Debt Covenant Hypothesis1,121 cited
  • 1994Accounting choice in troubled companies855 cited
  • 1997Underpricing, ownership and control in initial public offerings of equity securities in the UK606 cited
  • 2003Earnings Manipulation in Failing Firms421 cited
  • 2003Debtor-in-possession financing and bankruptcy resolution: Empirical evidence184 cited
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    • 2014Earnings management among bankrupt non-listed firms: evidence from Spain42 cited
    • 2011Hedging and earnings management in the light of IFRS implementation: Evidence from the UK stock market41 cited
    • 2017Forecasting Corporate Bankruptcy Using Accrual-Based Models41 cited
    • 2019Accruals quality and the cost of debt: the European evidence40 cited
    • 2016Earnings Management before Bankruptcy: A Review of the Literature39 cited
    • 2012Income smoothing behaviour by Asian transportation firms38 cited
    • 2014Efficient contracting, earnings smoothing and managerial accounting discretion35 cited
    • 2017Do financially distressed firms misclassify core expenses?33 cited
    • 2017Accrual management as an indication of money laundering through legally registered Mafia firms in Italy32 cited
    • 2021Real earnings management in bankrupt firms28 cited
    • 2013Integrity of financial information as a determinant of the outcome of a bankruptcy procedure25 cited
    • 2019Earnings Management in Malaysian Companies during the Global Financial Crisis and the Coincidental Effect of IFRS Adoption22 cited
    • 2023Does top management team diversity affect accounting quality? Empirical evidence from Germany22 cited