Abstract

http://ssrn.com/abstract=1114925
 
 

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Citations (11)



 


 



Elections and Discretionary Accruals: Evidence from 2004


Karthik Ramanna


Harvard University - Harvard Business School

Sugata Roychowdhury


Boston College

December 15, 2009

Journal of Accounting Research, Forthcoming
Harvard Business School Accounting & Management Unit Working Paper No. 09-103

Abstract:     
We examine the accrual choices of outsourcing firms with links to US congressional candidates during the 2004 elections, when corporate outsourcing was a major campaign issue. We find that politically-connected firms with more extensive outsourcing activities have more income-decreasing discretionary accruals. Further, relative to adjacent periods, the evidence is concentrated in the two calendar quarters immediately preceding the 2004 election, consistent with heightened incentives for firms to manage earnings during the election season. The incentives can be attributed to donor firms' concerns about the potentially negative consequences of scrutiny over outsourcing for themselves and for their affiliated candidates.

Number of Pages in PDF File: 51

Keywords: accounting information, accruals management, campaign contributions, discretionary accruals, earnings management, election outcomes, political currency, political economy, political process

JEL Classification: D72, M41, M43, M44, M49, P16

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Date posted: April 1, 2008 ; Last revised: January 1, 2010

Suggested Citation

Ramanna, Karthik and Roychowdhury, Sugata, Elections and Discretionary Accruals: Evidence from 2004 (December 15, 2009). Journal of Accounting Research, Forthcoming; Harvard Business School Accounting & Management Unit Working Paper No. 09-103. Available at SSRN: http://ssrn.com/abstract=1114925

Contact Information

Karthik Ramanna
Harvard University - Harvard Business School ( email )
Morgan 389
Boston, MA 02163
United States
HOME PAGE: http://www.hbs.edu/kramanna
Sugata Roychowdhury (Contact Author)
Boston College ( email )
140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States
617-552-1764 (Phone)
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