Earnings announcement timing and earnings management

Ho Young Lee, Myungsoo Son

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

This study examines whether earnings announcement timing is associated with earnings management. Unlike prior studies, we partition earnings reporting delay into two separate components: audit report lag and management discretionary lag. Using recent data, we find that less earnings management by late earnings reporters are attributable to auditors rather than management. After controlling for other factors, we show that auditors who lengthen their audit work are likely to permit less earnings management, possibly to minimize their litigation risk. This drives a negative association between total report lag and earnings management. However, no statistically significant association is found between management discretionary lag and earnings management. We find a positive association between management discretionary lag and earnings management only in the sub-sample where earnings were disclosed after the audit report date.

Original languageEnglish
Pages (from-to)319-326
Number of pages8
JournalApplied Financial Economics
Volume19
Issue number4
DOIs
Publication statusPublished - 2009 Feb 23

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Earnings management
Earnings announcements
Lag
Auditors
Audit reports
Litigation risk
Factors
Audit

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Finance

Cite this

Lee, Ho Young ; Son, Myungsoo. / Earnings announcement timing and earnings management. In: Applied Financial Economics. 2009 ; Vol. 19, No. 4. pp. 319-326.
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Earnings announcement timing and earnings management. / Lee, Ho Young; Son, Myungsoo.

In: Applied Financial Economics, Vol. 19, No. 4, 23.02.2009, p. 319-326.

Research output: Contribution to journalArticle

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