An analysis of earnings management by European private firms

Coppens, Laurent; Peek, Erik

doi:10.1016/j.intaccaudtax.2005.01.002

Cited by 181 publications

(122 citation statements)

References 24 publications

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“…Each histogram in Figure 1 presents a peak of observations in the first positive interval 1, corresponding to the range [0-0.005) and a marked discontinuity both to the left and to the right of it, that are the typical characteristics of earnings management practices aiming to minimize earnings (Coppens and Peek, 2005;Marques et al, 2011;Poli, 2013aPoli, , b, 2015a. Table 4 shows the test statistics suggested by Burgstahler and Dichev (1997).…”

Section: Findings and Discussionmentioning

confidence: 99%

“…Although, it has been criticized by some scholars (Beaver et al, 2007;Dechow et al, 2003;Easton, 2005, 2009;Holland, 2004;Lahr, 2014;McNichols, 2003), it has been widely used in the literature (Baber and Kang, 2002;Beatty et al, 2002;Brown and Caylor, 2004;Collins et al, 1999;Coppens and Peek, 2005;Daske et al, 2006;Degeorge et al, 1999;Easton, 1999;Gore et al, 2007;Hamdi and Zarai, 2012;Hayn, 1995;Holland and Ramsay, 2003;Huang and Hsiao, 2011;Jacob and Jorgensen, 2007;Kerstein and Rai, 2007;Marques et al, 2011;Moreira, 2006;Phillips et al, 2004;Poli, 2013aPoli, , b, 2015aRevsine et al, 2009).…”

Section: Research Design and Sample Selectionmentioning

confidence: 99%

“…In adopting this approach, EM is signaled by the presence of discontinuities between the first negative earnings interval and the first positive earnings interval and between the first positive earnings interval and the second positive earnings interval of the earnings frequency distribution (Coppens and Peek, 2005;Marques et al, 2011;Poli, 2013aPoli, , b, 2015a. ECM, on the other hand, is signaled by the presence of discontinuities between the second negative earnings change interval and the first negative earnings change interval and between the first positive earnings change interval and the second positive earnings change interval of the earnings change frequency distribution (Coppens and Peek, 2005;Poli, 2013aPoli, , 2015a.…”

Section: Research Design and Sample Selectionmentioning

confidence: 99%

“…ECM, on the other hand, is signaled by the presence of discontinuities between the second negative earnings change interval and the first negative earnings change interval and between the first positive earnings change interval and the second positive earnings change interval of the earnings change frequency distribution (Coppens and Peek, 2005;Poli, 2013aPoli, , 2015a. A discontinuity emerges if the number of the observations falling in a given interval of the frequency distribution is significantly higher than expected and if the number of the observations falling in one or both of the immediately adjacent intervals of the frequency distribution is significantly lower than expected.…”

Section: Research Design and Sample Selectionmentioning

confidence: 99%

“…Companies practice EM when they manage earnings to bring them close to zero (Coppens and Peek, 2005;Marques et al, 2011;Poli, 2013aPoli, , b, 2015a. They practice ECM, instead, when they manage earnings to avoid large earnings changes or, in other words, to smooth earnings (Coppens and Peek, 2005;Poli, 2013aPoli, , 2015a.…”

Section: Introductionmentioning

confidence: 99%

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Is gender diversity in ownership structure related to private Italian companies propensity to engage in earnings management practices?

Poli¹

2017

Afr. J. Bus. Manage.

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The study investigates whether and how gender diversity in ownership structure (here intended as female ownership) is related to private (unlisted) Italian companies' propensity to engage in earnings management practices, specifically in "earnings minimization" (EM) and "earnings change minimization" (ECM). Companies practice EM when they manage earnings to bring them close to zero. They practice ECM, instead, when they manage earnings to avoid large earnings chan ges or, in other words, to "smooth" company earnings. Companies that engage in such practices are detected by adopting the earnings distribution approach. The results of chi -square tests for equality of distributions show that the earnings frequency distributions and the earnings change frequency distributions, conditional on the portion of equity held by female owners, are significantly equal from a statistical point of view, demonstrating that gender diversity in ownership structure and private Italian co mpanies' propensity to engage in EM and ECM are not related. Logit analysis models confirm these findings. The main contribution this study brings to the literature consists in the fact that it is the first study that investigates the relationship between gender diversity in ownership structure and earnings management practices.

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Section: Findings and Discussionmentioning

confidence: 99%

Section: Research Design and Sample Selectionmentioning

confidence: 99%

Section: Research Design and Sample Selectionmentioning

confidence: 99%

Section: Research Design and Sample Selectionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Is gender diversity in ownership structure related to private Italian companies propensity to engage in earnings management practices?

Poli¹

2017

Afr. J. Bus. Manage.

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Marktnahe Bewertung von Unternehmen nach der Erbschaftsteuerreform?

Müller

Sureth

2011

Schmalenbachs Z betriebswirtsch Forsch

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The Effects of Immigration on Labour Tax Avoidance: An Empirical Spatial Analysis

et al. 2019

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We investigate whether the geographic concentration of non-EU immigrants in the various Italian provinces affects labour tax avoidance (LTAV) practices adopted by firms located in the same provinces, as well as in the neighbouring provinces, and operating in construction and agriculture industries that mostly employ immigrants in Italy. For this purpose, we develop a LTAV proxy based on the financial accounting information of a sample of 993,606 firm-years disseminated throughout 108 Italian provinces over the period 2008-2016.Our results, based on a Spatial Durbin Model panel regression, reveal a statistically significant positive association between non-EU immigrant concentration and LTAV at province-level as well as the presence of spillover effects among neighbouring provinces. Our findings are robust to several additional analyses, including instrumental variable estimations to account for possible endogeneity.Our study provides empirical support to previous structuralist or marginalization theories holding that socio-economically marginalized groups, such as non-EU immigrants, are more likely to be involved in undeclared work and/or other labour exploitation practices, which could underlie our LTAV outcomes. Furthermore, it supports the need for tax authorities to strengthen controls and labour inspections, especially in those contexts where non-EU immigrants are mostly employed. On the other hand, a greater social integration and recognition of rights of immigrants may help to alleviate their situation of weakness that makes them more vulnerable to labour exploitation practices. Finally, effectively tackling LTAV, associated with the underemployment of immigrants, may prevent its negative effects for society arising from the reduction of public resources to sustain the social welfare and finance public goods and services.

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An analysis of earnings management by European private firms

Cited by 181 publications

References 24 publications

Is gender diversity in ownership structure related to private Italian companies propensity to engage in earnings management practices?

Is gender diversity in ownership structure related to private Italian companies propensity to engage in earnings management practices?

Marktnahe Bewertung von Unternehmen nach der Erbschaftsteuerreform?

The Effects of Immigration on Labour Tax Avoidance: An Empirical Spatial Analysis

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