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The Choice Between Accrual and Real Manipulation Around Information Uncertainty

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Proceedings of the 4th International Conference on Research in Management and Technovation (ICRMAT 2023)

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Abstract

Previous studies on opportunistic earnings management using accrual and real manipulation related to benchmark-beating find mixed evidence, especially when investigating alternative mechanisms (i.e., accrual earnings management and real earnings management). One issue that has not been examined is the information uncertainty environment. We expect that greater information uncertainty would provide more ambiguity about earnings management for market participants. Therefore, if managers are opportunistic, they are more likely to choose the less costly earnings management mechanism, i.e., accrual manipulation. The overall results show that firms just meeting earnings benchmarks use more accrual earnings management but not real earnings management in the high information uncertainty environment. The results hold after controlling for endogeneity and other factors that may affect earnings management.

This paper has developed from my Ph.D. thesis from Kingston University.

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Author information

Authors and Affiliations

  1. Industrial University of Ho Chi Minh City, Ho Chi Minh, Vietnam

    Thi Thu Ha Nguyen

  2. Kingston University, Thames, England

    Salma Ibrahim

Authors
  1. Thi Thu Ha Nguyen
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  2. Salma Ibrahim
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Correspondence to Thi Thu Ha Nguyen .

Editor information

Editors and Affiliations

  1. Centre for Post-Graduate Studies, Hanoi University of Industry, Hanoi, Vietnam

    Thi Hong Nga Nguyen

  2. Gillings School of Global Public Health, University of North Carolina at Chapel, Chapel HIll, NC, USA

    Darrell Norman Burrell

  3. Department of Computer Science and Engineering, CMR Institute of Technology, Hyderabad, Telangana, India

    Vijender Kumar Solanki

  4. Accounting and Auditing Faculty, Academy of Finance, Hanoi, Vietnam

    Ngoc Anh Mai

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© 2024 The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.

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Nguyen, T.T.H., Ibrahim, S. (2024). The Choice Between Accrual and Real Manipulation Around Information Uncertainty. In: Nguyen, T.H.N., Burrell, D.N., Solanki, V.K., Mai, N.A. (eds) Proceedings of the 4th International Conference on Research in Management and Technovation. ICRMAT 2023. Springer, Singapore. https://doi.org/10.1007/978-981-99-8472-5_2

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