Private Communication and Earnings Management
18 Pages Posted: 12 Dec 2019
Date Written: November 25, 2019
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: Suggested Citation