Stakeholder Influence on Earnings Management: Ethical Considerations and Potential Avenues

Corporate Ownership and Control, Vol. 13 (2016)

31 Pages Posted: 21 May 2015 Last revised: 14 Mar 2016

Thomas R. Loy

University of Bayreuth - Business Administration

Date Written: March 12, 2016

Abstract

Financial reports are a major bonding agent in (prospective) firm-stakeholder relationships. Therefore, earnings management might induce stakeholders to accept terms of trade which they would have not, knowing the true situation. The issue becomes even more complicated and potentially conflict-laden if some stakeholders would possess the ability to influence firms' earnings management behavior and exploit this at the expense of others. Four generalizable avenues of potential stakeholder influence are presented.

Keywords: Stakeholder theory, Earnings management, Ethical implications

Suggested Citation

Loy, Thomas R., Stakeholder Influence on Earnings Management: Ethical Considerations and Potential Avenues (March 12, 2016). Corporate Ownership and Control, Vol. 13 (2016). Available at SSRN: https://ssrn.com/abstract=2608612 or http://dx.doi.org/10.2139/ssrn.2608612

Thomas R. Loy (Contact Author)

University of Bayreuth - Business Administration ( email )

Universitätsstr. 30
Bayreuth, 95447
Germany

HOME PAGE: http://www.wp.uni-bayreuth.de

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