Leon Li and Nen-Chen Richard Hwang
The purpose of this paper is to postulate that market participants’ views on the nature of discretionary accruals as earnings management or earnings manipulation could relate to a…
Abstract
Purpose
The purpose of this paper is to postulate that market participants’ views on the nature of discretionary accruals as earnings management or earnings manipulation could relate to a rise or a fall in a firm’s stock prices.
Design/methodology/approach
Applying the quantile regression and measuring gains and losses according to the stock returns, this study shows that the relation between earnings manipulation and stock returns is non-uniform and it varies significantly across various quantiles of the latter.
Findings
The empirical results imply a positive (negative) |DA|-RETURN relation for stocks experiencing a rise (fall) in stock prices. This finding is consistent with the notion that market participants lean towards (become) trend followers (fundamentalists) when their stocks price rise (fall) and, thus, positively reward (negatively punish) discretionary accruals.
Originality/value
Using the behavioural heterogeneity of market participants as a research framework, this paper contributes to the literature by demonstrating that market participants’ decisions to positively reward (negatively punish) earning management behaviour depend on their perceptions on nature of discretionary accruals (earnings management vs earnings manipulation).
Details
Keywords
This paper aims to discuss the study by Warne (2020), which investigates whether disclosure or recognition of fair value information for nonfinancial assets influences commercial…
Abstract
Purpose
This paper aims to discuss the study by Warne (2020), which investigates whether disclosure or recognition of fair value information for nonfinancial assets influences commercial lenders’ judgment on interest rates and the dollar amounts of business loans.
Design/methodology/approach
Provides a discussion of research design and general issues related to behavioral/experimental studies.
Findings
Identifies issues that should be carefully thought out and properly addressed by behavioral researchers in order to improve the robustness of the empirical evidence.
Originality/value
This discussion highlights issues that should be carefully thought out and properly addressed by behavioral researchers in order to improve the robustness of the empirical evidence.
Details
Keywords
Chee W. Chow, Richard Nen‐Chen Hwang and Y. Robert Lin
In the current era of intensifying global competition, much attention has been focused on how companies need to change their structures and processes, or more broadly…
Abstract
In the current era of intensifying global competition, much attention has been focused on how companies need to change their structures and processes, or more broadly, organizational cultures, to remain competitive in this environment. Three recent studies have examined the nature of accounting firms' organizational cultures. Soeters and Schreuder (1988) and Pratt, Mohrweis and Beaulieu (1993) tested the degree to which accounting firms are able to transfer their home‐country or ganizational cultures to their foreign operations, while Pratt and Beaulieu (1992) analyzed the organizational culture of U.S. accounting firms operating in their home country. An implicit premise of these prior studies is that an accounting firm's organizational culture is an important determinant of its economic success. Thus, Pratt and Beaulieu (1992) hypothesized that organizational culture would vary with such variables as accounting firm size and functional area. Yet none of these prior studies has directly studied the nature of these firms’ external environments to which they were presumably responding. Nor have they directly measured the fit between these firms' organizational cultures and the external environment, or the effect of this fit on firm performance. The current study extends the empirical investigation to these assumed linkages. Data were collected from a sample of accounting firms operating in an important Pacific Rim participant in the global economy — Taiwan. The results are consistent with the fit between organizational culture and the environment being an important determinant of firm performance.
Nen-Chen Richard Hwang and Donghui Wu
The purpose of this study is to investigate whether the emergence of specialized journals has affected management accounting research paradigms. Articles published in eight…
Abstract
The purpose of this study is to investigate whether the emergence of specialized journals has affected management accounting research paradigms. Articles published in eight leading accounting journals from 1991 to 2000 are analyzed using Shields’ (1997) classification schemes. The study reports two major findings. One is that the overall percentage of management accounting research published in five non-specialized accounting journals has remained relatively constant since the establishment of three specialized journals oriented to management accounting research. The other is that the editorial boards of specialized journals appear to have broader interests in research Topics, to be more flexible with regard to research Methods, and are more willing to accept manuscripts adopting various Theories. Overall, the results of this study support that the emergence of management accounting research journals impacted research paradigms gradually during the 1990s.