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Recent literature suggests that sin firms (firms in tobacco, gambling and alcohol industries) have lower institutional ownership, fewer analysts following, higher abnormal returns and higher financial reporting quality. This study aims to investigate empirically how sin firms engage in real activities manipulation (RAM) to meet earnings benchmarks in comparison to non-sin firms.

The authors examine two types of RAM, namely, Cutting discretionary expenditures including research and development (R&D), SG&A and advertising to boost earnings. Extending deep discount or lenient credit terms to boost sales and/or overproducing to decrease COGS to increase gross profit. Consistent with Roychowdhury (2006), the authors use abnormal discretionary expenditures as the proxy for expenditure reduction manipulation and abnormal production costs as the proxy for COGS manipulation.

The results for the abnormal discretionary expense model suggest that sin firms do not engage in RAM of advertising, R&D, SG&A expense to just meet earnings benchmarks. The results for the production costs model suggest that sin firms do not engage in COGS manipulation to just meet earnings benchmarks. The results are robust after controlling accrual-based earnings management (AEM). Overall, in this setting, these results suggest that managers of sin firms engage less in RAM to meet earnings benchmarks.

The findings are of interest to investors, auditors, regulators and academics with respect to financial statement analysis and earnings quality.

Due to the developments in information technologies, new concepts and practices have emerged in the field of accounting and auditing. One of these concepts is the concept of Forensic Accounting. Forensic accounting acts as a bridge between law and accounting sciences. Academic strutting about forensic accounting carried out in Turkey is increasing every day. In this study, we aim to examine the views of Turkish accounting academicians about skills of forensic accountant. Within this scope, we investigate whether there is any difference in views of Turkish accounting academicians by their gender, title, age, experience and university department (faculty, vocational school, etc.). Survey was sent to 543 Turkish accounting academicians via e-mail. 80 responses were used as data. Data analysis was made in SPSS Statistics 17.0. Means, standard deviations and percentages were computed for items related to skills of forensic accountant. Mann–Whitney U and Kruskal–Wallis tests were used to analyse whether there was any difference in views of Turkish accounting academicians by their gender, title, age, experience and university department. According to findings, the skills rated as most important by Turkish academicians are, respectively, deductive analysis, critical thinking and unstructured problem solving. The skills rated as least important by Turkish academicians are, respectively, oral communication, investigative flexibility and analytical proficiency. There is a significant difference in rating of the importance of critical thinking, investigative flexibility, analytical proficiency and written communication by gender and there is a significant difference in rating of the importance of deductive analysis, unstructured problem solving and composure by experience year as academician.