Impact of intangibility on managerial behaviour: evidence on earnings manipulation
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| Year of publication | 2023 |
| Type | Appeared in Conference without Proceedings |
| MU Faculty or unit | |
| Citation | |
| Description | The study addresses how intangible intensity company structure affects real and accrual earnings manipulation. Several studies have found the relevance of financial data in the valuation varies among intangible and tangible-intensive companies. The value relevance in earnings management could be a double-edged sword since manipulating one specific item may reduce the valuation effect on earnings growth. Thus, the study focuses on the effect of intangible intensity on different types of earnings manipulation as a motivation to increase company valuation. I deploy three types of real earnings (activities) manipulation, and accrual earnings management model based on value relevance from prior literature. I hypothesized and found that the different value relevance driven by intangible intensity affects the managerial behavior in manipulating earnings upwards. However, based on given results, I conclude that opportunistic executive’s behavior in conducting earnings manipulation based on the opportunities available, rather than fearing a valuation penalty. |
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