An empirical study on the impact of earnings management on cumulative abnormal returns of selected publicly listed companies in the Philippines from 2007-2013: Earnings management choice between accounting-based and real activities-based manipulation
Date of Publication
Master of Science in Accountancy
Ramon V. Del Rosario College of Business
Florenz C. Tugas
Defense Panel Chair
Rodiel C. Ferrer
Defense Panel Member
Herminigilda E. Salendrez
Katherine U. Sobremonte
Earnings management has been one of the most widely discussed phenomena. The exercise of managerial discretion and judgment in the financial reporting process has been a way used by some managers to exhibit an opportunistic behavior to mask the true economic performance of an entity and eventually mislead its stakeholders.
I focused on capital market incentives around earnings management in the Philippine setting, covering years 2007-2013. In particular, given the presence of financial statement evidence, I investigated how investors react to evidences of earnings management around the release of SEC Form 17-A. The study also explored two ways to facilitate earnings management- through discretionary accruals and reductions in discretionary expenditures. Results reveal that earnings management either through accounting-based or real-activities based manipulation does not significantly influence cumulative abnormal returns after the release of SEC Form 17-A. This can be attributed to the inherent complexity of the earnings management mechanism and the efficiency of the Philippine Stock Exchange (PSE).
Archives, The Learning Commons, 12F Henry Sy Sr. Hall
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Dela Cruz, A. C. (2015). An empirical study on the impact of earnings management on cumulative abnormal returns of selected publicly listed companies in the Philippines from 2007-2013: Earnings management choice between accounting-based and real activities-based manipulation. Retrieved from https://animorepository.dlsu.edu.ph/etd_masteral/5056