A Test of Income Smoothing Using Pseudo Fiscal Years

References

• Ahmed A, Neel M, Wang D (2013) Does mandatory adoption of IFRS improve accounting quality? Preliminary evidence. Contemporary Accounting Res. 30(4):1344–1372.Crossref, Google Scholar
• Allee K, Badertscher B, Yohn T (2020) Private vs. public corporate ownership: Implications for future changes in profitability. J. Management Accounting Res. 32(2):27–55.Crossref, Google Scholar
• Allen E, Larson C, Sloan R (2013) Accrual reversals, earnings and stock returns. J. Accounting Econom. 56(1):113–129.Crossref, Google Scholar
• Berger AN, Udell GF (1998) The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle. J. Banking Finance 22(6–8):613–673.Crossref, Google Scholar
• Burgstahler D, Chuk E (2015) Do scaling and selection explain earnings discontinuities? J. Accounting Econom. 60(1):168–186.Crossref, Google Scholar
• Burgstahler D, Dichev I (1997) Earnings management to avoid earnings decreases and losses. J. Accounting Econom. 24(1):99–126.Crossref, Google Scholar
• Chen W, Hribar P, Melessa S (2020) Incorrect inferences when using generated regressors in accounting research. Working paper, University of Connecticut, Storrs.Google Scholar
• Collins D, Hopwood A, McKeown J (1984) The predictability of interim earnings over alternative quarters. J. Accounting Res. 22(2):467–479.Crossref, Google Scholar
• Dechow P, Ge W, Schrand C (2010) Understanding earnings quality: A review of the proxies, their determinants and their consequences. J. Accounting Econ. 50(2–3):344–401.Crossref, Google Scholar
• Dechow P, Hutton A, Kim J, Sloan R (2012) Detecting earnings management: A new approach. J. Accounting Res. 50(2):275–334.Crossref, Google Scholar
• DeFond ML, Park CW (1997) Smoothing income in anticipation of future earnings. J. Accounting Econom. 23(2):115–139.Crossref, Google Scholar
• Demerjian PR, Donovan J, Lewis-Western MF (2020a) Income smoothing and the usefulness of earnings for monitoring in debt contracting. Contemporary Accounting Res. 37(2):857–884.Crossref, Google Scholar
• Demerjian PR, Lewis-Western MF, McVay SE (2020b) How does intentional earnings smoothing vary with managerial ability? J. Accounting Auditing Finance 35(2):406–437.Crossref, Google Scholar
• Dou Y, Hope O-K, Thomas WB (2013) Relationship-specificity, contract enforceability, and income smoothing. Accounting Rev. 88(5):1629–1656.Crossref, Google Scholar
• Durtschi C, Easton P (2005) Earnings management? The shapes of the frequency distributions of earnings metrics are not evidence ipso facto. J. Accounting Res. 43(4):557–592.Crossref, Google Scholar
• Durtschi C, Easton P (2009) Earnings management? Erroneous inferences based on earnings frequency distributions. J. Accounting Res. 47(5):1249–1281.Crossref, Google Scholar
• Francis J, LaFond R, Olsson PM, Schipper K (2004) Costs of equity and earnings attributes. Accounting Rev. 79(4):967–1010.Crossref, Google Scholar
• Fudenberg D, Tirole J (1995) A theory of income and dividend smoothing based on incumbency rents. J. Political Econom. 103(1):75–93.Crossref, Google Scholar
• Gaver JJ, Gaver KM, Austin JR (1995) Additional evidence on bonus plans and income management. J. Accounting Econom. 19(1):3–28.Crossref, Google Scholar
• Gerakos J (2012) Discussion of detecting earnings management: A new approach. J. Accounting Res. 50(2):335–347.Crossref, Google Scholar
• Gerakos J, Kovrijnykh A (2013) Performance shocks and misreporting. J. Accounting Econom. 56(1):57–72.Crossref, Google Scholar
• Gilliam TA, Heflin F, Paterson JS (2015) Evidence that the zero-earnings discontinuity has disappeared. J. Accounting Econom. 60(1):117–132.Crossref, Google Scholar
• Graham JR, Harvey CR, Rajgopal S (2005) The economic implications of corporate financial reporting. J. Accounting Econom. 40(1–3):3–73.Crossref, Google Scholar
• Grant J, Markarian G, Parbonetti A (2009) CEO risk-related incentives and income smoothing. Contemporary Accounting Res. 26(4):1029–1065.Crossref, Google Scholar
• Gunny KA, Jacob J, Jorgensen BN (2013) Implications of the integral approach and earnings management for alternate annual reporting periods. Rev. Accounting Stud. 18(3):868–891.Crossref, Google Scholar
• Hayn C (1995) The information content of losses. J. Accounting Econom. 20(2):125–153.Crossref, Google Scholar
• Hope O-K, Thomas W, Vyas D (2013) Financial reporting quality of U.S. private and public firms. Accounting Rev. 88(5):1715–1742.Crossref, Google Scholar
• Jacob J, Jorgensen BN (2007) Earnings management and accounting income aggregation. J. Accounting Econom. 43(2–3):369–390.Crossref, Google Scholar
• Jayaraman S (2008) Earnings volatility, cash flow volatility, and informed trading. J. Accounting Res. 46(4):809–851.Crossref, Google Scholar
• Jorgensen BN, Lee YG, Rock S (2014) The shapes of scaled earnings histograms are not due to scaling and sample selection: Evidence from distributions of reported earnings per share. Contemporary Accounting Res. 31(2):498–521.Crossref, Google Scholar
• Jung B, Soderstrom N, Yang Y (2013) Earnings smoothing activities of firms to manage credit ratings. Contemporary Accounting Res. 30(2):645–676.Crossref, Google Scholar
• Kanagaretnam K, Lobo G, Yang DH (2004) Joint tests of signaling and income smoothing through bank loan loss provisions. Contemporary Accounting Res. 21(4):843–884.Crossref, Google Scholar
• Kirschenheiter M, Melumad ND (2002) Can “big bath” and earnings smoothing co‐exist as equilibrium financial reporting strategies? J. Accounting Res. 40(3):761–796.Crossref, Google Scholar
• Lang M, Lins KV, Maffett M (2012) Transparency, liquidity, and valuation: International evidence on when transparency matters most. J. Accounting Res. 50(3):729–774.Crossref, Google Scholar
• Lee YJ, Petroni K, Shen M (2006) Cherry picking, disclosure quality, and comprehensive income reporting choices: The case of property-liability insurers. Contemporary Accounting Res. 23(3):655–692.Crossref, Google Scholar
• Leuz C, Nanda D, Wysocki PD (2003) Earnings management and investor protection: An international comparison. J. Financial Econom. 69(3):505–527.Crossref, Google Scholar
• Lim S, Lustgarten S (2002) Testing for income smoothing using the backing out method: A review of specification issues. Rev. Quant. Finance Accounting 19(3):273–290.Crossref, Google Scholar
• Lipe R, Bernard V (2000) Differences between interim and fourth-quarter earnings: An analysis of volatility and association with stock returns. Working paper, University of South Carolina, Columbia.Google Scholar
• Liu CC, Ryan SG (2006) Income smoothing over the business cycle: Changes in banks’ coordinated management of provisions for loan losses and loan charge-offs from the pre-1990 bust to the 1990s boom. Accounting Rev. 81(2):421–441.Crossref, Google Scholar
• Mande V, File R, Kwak W (2000) Income smoothing and discretionary R&D expenditures of Japanese firms. Contemporary Accounting Res. 17(2):263–302.Crossref, Google Scholar
• McInnis J (2010) Earnings smoothness, average returns, and implied cost of equity capital. Accounting Rev. 85(1):315–341.Crossref, Google Scholar
• Rountree B, Weston JP, Allayannis G (2008) Do investors value smooth performance? J. Financial Econom. 90(3):237–251.Crossref, Google Scholar
• Shu S, Thomas W (2019) Managerial equity holdings and income smoothing incentives. J. Management Accounting Res. 31(1):195–218.Crossref, Google Scholar
• Smith R, Lipin S, Naj A (1994) Managing profits: How General Electric damps fluctuations in its annual earnings. Wall Street Journal (November 3), A1.Google Scholar
• Subramanyam KR (1996) The pricing of discretionary accruals. J. Accounting Econom. 22(1–3):249–281.Crossref, Google Scholar
• Trueman B, Titman S (1988) An explanation for accounting income smoothing. J. Accounting Res. 26:127–139.Crossref, Google Scholar
• Tucker JW, Zarowin PA (2006) Does income smoothing improve earnings informativeness? Accounting Rev. 81(1):251–270.Crossref, Google Scholar