Electronic Theses and Dissertations

Identifier

94

Yu Chen

Date

2010

Document Type

Dissertation (Access Restricted)

Degree Name

Doctor of Philosophy

Major

Business Administration

Concentration

Accounting

Committee Chair

Zabihollah Rezaee

Committee Member

Charles D. Bailey

Committee Member

James M. Lukawitz

Committee Member

Christine X. Jiang

Abstract

This dissertation examines the effects of types of accounting standards on earnings management from a global perspective. I examine the ability or inability of principles-based as well as rules-based accounting standards in curbing accruals earnings management and real activities earnings management. I also examine the roles played by internal corporate governance, audit quality and external corporate governance in this potential relationship between types of accounting standards and earnings management. The results show that under the condition of weak (strong) internal corporate governance, companies that use principles-based standards tend to engage in more (less) accruals earnings management compared with companies that use rules-based standards. Due to the substitution effect, companies that use principles-based standards tend to engage in less real activities earnings management compared with companies that use rules-based standards under the weak internal corporate governance condition. Similarly, high audit quality tends to curb both accruals earnings management and real activities earnings management no matter what types of accounting standards companies use. However, regardless of audit quality, companies that use rules-based standards engage less in accruals earnings management compared with those use principles-based standards. Furthermore, regardless of audit quality, companies that use rules-based standards engage more in real activities earnings management compared with those that use principles-based standards. These findings have important implications for investors, regulators and educators.

Comments

Data is provided by the student.

Library Comment

Dissertation or thesis originally submitted to the local University of Memphis Electronic Theses & dissertation (ETD) Repository.

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