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Title:Entry threat as a determinant of accounting earnings management
Author(s):Kang, Byung-Min Andrew
Doctoral Committee Chair(s):Silhan, Peter A.
Department / Program:Accountancy
Degree Granting Institution:University of Illinois at Urbana-Champaign
Subject(s):Business Administration, Accounting
Abstract:The purpose of this study is to empirically investigate if entry threat, as reflected in industrial market structure, affects earnings management. Specifically, this study uses entry barriers as a proxy for probability of potential entries, and market leadership and market concentration as proxies for entry-induced incumbency losses. It then examines how these industrial variables influence the use of discretionary accruals when entry threat is increased during periods of peak corporate performance.
The empirical results show that during peak performance periods, (1) firms tend to rely on discretionary income-decreasing accruals, (2) the accruals for firms with low entry barriers tend to become more income-decreasing, and (3) the income-decreasing accruals of low entry barrier firms get larger if they are market leading firms or if they operate in concentrated industries. The empirical results suggest entry threat as a determinant of discretionary accruals.
Issue Date:1995
Rights Information:Copyright 1995 Kang, Byung-Min Andrew
Date Available in IDEALS:2011-05-07
Identifier in Online Catalog:AAI9543618
OCLC Identifier:(UMI)AAI9543618

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