What Have We Learned About Earnings Management? Integrating Discontinuity Evidence

35 Pages Posted: 20 Jun 2011 Last revised: 18 Jul 2015

See all articles by David Burgstahler

David Burgstahler

University of Washington

Elizabeth Chuk

University of California, Irvine - Paul Merage School of Business

Date Written: March 30, 2015

Abstract

The accounting literature includes numerous examples of discontinuities at prominent benchmarks that are widely interpreted as evidence that earnings are managed to meet those benchmarks. However, there are also a few examples where discontinuities do not exist, which are sometimes interpreted as inconsistent with earnings management. There are also several suggested alternative explanations for discontinuities. This paper reviews and integrates the various elements of the body of discontinuity-related evidence.

Keywords: earnings management, discontinuities

JEL Classification: G14, M40

Suggested Citation

Burgstahler, David C. and Chuk, Elizabeth, What Have We Learned About Earnings Management? Integrating Discontinuity Evidence (March 30, 2015). Available at SSRN: https://ssrn.com/abstract=1866008 or http://dx.doi.org/10.2139/ssrn.1866008

David C. Burgstahler (Contact Author)

University of Washington ( email )

555 Paccar Hall, Box 353226
Seattle, WA 98195-3226
United States
206-543-6316 (Phone)
206-685-9392 (Fax)

Elizabeth Chuk

University of California, Irvine - Paul Merage School of Business ( email )

University of California, Irvine
Irvine, CA California 92697-3125
United States

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