Discussion of “Performance, growth and earnings management”
Review of Accounting Studies · 2006 · Volume 11 · Issue 2
DOI: 10.1007/s11142-006-9010-3
Abstract
In an economy of firms with varying levels of performance, which firms are more likely to manage their earnings? The conference paper by Lee, Li, and Yue provides a promising approach to disentangle economic performance from earnings management in large-sample settings. The authors develop an analytical signaling model of earnings management in an economy and confront its equilibrium predictions with the data.
Keywords
Earnings management, Signaling
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