Earnings-based bonus plans and earnings management by business-unit managers

Article Abstract:

The management and financial database of a large corporation was used to test the bonus-maximization hypothesis. Analysis of the corporate inventory reserve account reveals that most business-unit managers manipulate earnings to maximize short-term bonus plans. Since these managers have the greatest opportunity to manipulate earnings through information asymmetry, such transactions continue to exist between business-unit managers and upper management personnel even during inventory valuation.

Bonus & Merit Payments, Management, Compensation and benefits, Compensation management, Executives, Executive compensation, Bonuses, Commissions (Compensation), Commissions (Fees)

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An empirical analysis of auditor reporting and its association with abnormal accruals

Article Abstract:

The relation between audit opinions and abnormal accruals are studied after taking into account the variation in the types of modified opinions the auditor gives. Such relationships exists in companies that have going-concern opinions as these firms have large negative accruals that are likely due to severe financial distress.

Services information, Accounting, auditing, & bookkeeping, Accounting & Auditing Services, Accounting, Tax Preparation, Bookkeeping, and Payroll Services, Analysis, Services, Auditing, Accounting firms, Accounting services

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Going-concern initial public offerings

Article Abstract:

Research is presented describing the study of small business capital raising management using audit reports for a going-concern when seeking initial public offerings.

Finance, Small business, Going public (Securities), Initial public offerings, Going concern (Accounting), Going concern

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