Earnings Manipulation and Adjustment Speed towards an Optimal Leverage

Advances in Mathematical Finance and Applications

مقالات آماده انتشار، پذیرفته شده، انتشار آنلاین از تاریخ 16 دی 1399  

نوع مقاله: Research Paper

شناسه دیجیتال (DOI): 10.22034/amfa.2020.1912619.1500

نویسندگان

Abbas Aflatooni ¹؛ Mahdi Khazaei²؛ Zahra Nikbakht³

¹Department of Accounting, Bu-Ali Sina University, Hamedan, Iran

²Department of Accounting, Bu-Ali Sina University, Hamadan, Iran

³Department of Management, Economics and Accounting, Payam Noor University (PNU), P.OBox, 19395-4697 Tehran, Iran

چکیده

This study examines whether the firms’ leverage adjustment speed is influenced by real and accrual-based earnings manipulation over the period 2006-2019. We find evidence suggesting that the leverage adjustment speed in firms with a higher level of real and accrual-based earnings manipulation is slower than that of other firms. Specifically, we show that under-levered (over-levered) firms with a higher level of earnings manipulation tend to adjust their actual leverage toward an optimal level, faster (slower) than that of other firms. These results are robust to different metrics for real and accrual-based earnings management, an alternative set of leverage determinants, alternative sample periods, and various estimation methods.

کلیدواژه‌ها

Real activities manipulation؛ Accrual-based earnings manipulation؛ Optimal leverage؛ Speed of adjustment؛ Leverage deviation