Private Communication and Earnings Management

18 Pages Posted: 12 Dec 2019

See all articles by Zhen QI

Zhen QI

Guangzhou University - School of Economics and Statistics

Yixiao Zhou

Australian National University (ANU) - Crawford School of Public Policy

Jian Chen

Guangzhou University

Date Written: November 25, 2019

Abstract

This study conducts the first analysis of the influence of private communication on earnings management. Results show that private communication can curb earnings management; the constraining effect of private communication on earnings management is greater when the number of external participants, especially institutional investors, is larger. Further, the greater the depth and breadth of communication, the more earnings management is reduced. Our findings provide significant implications for investors and regulators that seek to curb earnings management.

Keywords: private communication; earnings management; communication depth; communication breadth; external participants

JEL Classification: G14; G18; G34; G38

Suggested Citation

QI, Zhen and Zhou, Yixiao and Chen, Jian, Private Communication and Earnings Management (November 25, 2019). Available at SSRN: https://ssrn.com/abstract=3493131 or http://dx.doi.org/10.2139/ssrn.3493131

Zhen QI (Contact Author)

Guangzhou University - School of Economics and Statistics ( email )

Guangzhou Higher Education Mega Center
Waihuanxi Road 230
Guangzhou, Guangdong 510006
China

Yixiao Zhou

Australian National University (ANU) - Crawford School of Public Policy ( email )

7 Liversidge Street
Lennox Crossing
Canberra, ACT 0200
Australia

Jian Chen

Guangzhou University ( email )

Guangzhou Higher Education Mega Center
Waihuanxi Road 230
Guangzhou, Guangdong 510006
China

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