University of Illinois Urbana-Champaign

Entry threat as a determinant of accounting earnings management

Kang, Byung-Min Andrew

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https://hdl.handle.net/2142/21078

Description

Title
Entry threat as a determinant of accounting earnings management
Author(s)
Kang, Byung-Min Andrew
Issue Date
1995
Doctoral Committee Chair(s)
Silhan, Peter A.
Department of Study
Accountancy
Discipline
Accountancy
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Business Administration, Accounting
Language
eng
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.
Type of Resource
text
Permalink
http://hdl.handle.net/2142/21078
Copyright and License Information
Copyright 1995 Kang, Byung-Min Andrew

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