The association between competition and managers' business segment reporting decisions
Article Abstract:
A sample of 929 firms which reported business segments in their annual reports from 1987-1991 was scrutinized to study the link between levels of industry competition and managers' choices of which operations to report as business segments. A logit model has been designed that will reflect the decision of the management of any given industry to report operations as a segment as being a function of two measures of industry competition: the four-firm concentration ratio and a measure of the speed of profit adjustment. Data indicate that operations in less competitive industries are less likely to be reported as industry segments, which implies that the competitive harm ascribed to a disinclination to report operations as segments stems from a desire to protect abnormal profits and market share in less competitive industries.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
Book-tax differences and Internal Revenue Service adjustments
Article Abstract:
A study on corporate earnings management found that proposed IRS audit adjustments increase as the amount of book income exceeding taxable income becomes greater. Data were drawn from tax returns and tax audit results for a sample of 1,545 firm-years between 1982 and 1992. Findings provide the first explicit proof that firms cannot separately maximize financial reporting benefits and tax savings without incurring costs. This supports the assumption among financial accounting researchers that firms need to balance book and tax incentives for earnings management. In light of this finding, researchers can keep on employing financial income information to make conclusions about tax consequences.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
Open interest in stock options around quarterly earnings announcements
Article Abstract:
Research examines the behavior of open interest in listed stock options around quarterly earnings announcements. A significant decline in open interest prior to announcements was found by using pooled time series cross-section regressions. Open interest was found to behave differently for options whose values are most sensitive to changes in stock volatility. The results suggest that the behavior of open interest is correlated with recently documented temporary increases in the volatility of stock returns around announcement dates.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1988
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: The accountant - bean counter or business expert? Breaking the financial code
- Abstracts: The relationship between corporate entrepreneurship and strategic management. Entrepreneurship and paths to business ownership
- Abstracts: The line between the cash and accrual methods has narrowed, but the choices remain important. Home office deduction has been narrowed, but is still available after the Tax Reform Act
- Abstracts: The relation between Treasury yields and corporate bond yield spreads. A tax-induced clientele for index-linked corporate bonds
- Abstracts: An experimental examination of mood effects on retrieval and evaluation of advertisement and brand information