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Article: Smoothing income in anticipation of future earnings

TitleSmoothing income in anticipation of future earnings
Authors
KeywordsAccruals
Contracting
Income Smoothing
Job Security
Issue Date1997
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jae
Citation
Journal Of Accounting And Economics, 1997, v. 23 n. 2, p. 115-139 How to Cite?
AbstractRecent theory argues that concern about job security creates an incentive for managers to smooth earnings in consideration of both current and future relative performance. We find support for this theory. Our evidence suggests that when current earnings are 'poor' and expected future earnings are 'good', managers 'borrow' earnings from the future for use in the current period. Conversely, when current earnings are 'good' and expected future earnings are 'poor' managers 'save' current earnings for possible use in the future. However, sensitivity analysis indicates that we cannot rule out selection bias as a potential alternative explanation for our findings.
Persistent Identifierhttp://hdl.handle.net/10722/177858
ISSN
2015 Impact Factor: 3.535
2015 SCImago Journal Rankings: 6.834
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorDefond, MLen_US
dc.contributor.authorPark, CWen_US
dc.date.accessioned2012-12-19T09:40:35Z-
dc.date.available2012-12-19T09:40:35Z-
dc.date.issued1997en_US
dc.identifier.citationJournal Of Accounting And Economics, 1997, v. 23 n. 2, p. 115-139en_US
dc.identifier.issn0165-4101en_US
dc.identifier.urihttp://hdl.handle.net/10722/177858-
dc.description.abstractRecent theory argues that concern about job security creates an incentive for managers to smooth earnings in consideration of both current and future relative performance. We find support for this theory. Our evidence suggests that when current earnings are 'poor' and expected future earnings are 'good', managers 'borrow' earnings from the future for use in the current period. Conversely, when current earnings are 'good' and expected future earnings are 'poor' managers 'save' current earnings for possible use in the future. However, sensitivity analysis indicates that we cannot rule out selection bias as a potential alternative explanation for our findings.en_US
dc.languageengen_US
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jaeen_US
dc.relation.ispartofJournal of Accounting and Economicsen_US
dc.subjectAccrualsen_US
dc.subjectContractingen_US
dc.subjectIncome Smoothingen_US
dc.subjectJob Securityen_US
dc.titleSmoothing income in anticipation of future earningsen_US
dc.typeArticleen_US
dc.identifier.emailPark, CW: acparkc@hku.hken_US
dc.identifier.authorityPark, CW=rp01090en_US
dc.description.naturelink_to_subscribed_fulltexten_US
dc.identifier.doi10.1016/S0165-4101(97)00004-9-
dc.identifier.scopuseid_2-s2.0-0031187968en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-0031187968&selection=ref&src=s&origin=recordpageen_US
dc.identifier.volume23en_US
dc.identifier.issue2en_US
dc.identifier.spage115en_US
dc.identifier.epage139en_US
dc.identifier.isiWOS:A1997XM89300002-
dc.publisher.placeNetherlandsen_US
dc.identifier.scopusauthoridDeFond, ML=6602107693en_US
dc.identifier.scopusauthoridPark, CW=37062708100en_US

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