Title: Earnings Management: Evidence from South Africa
Abstract: This paper investigates the distribution of South African earnings and the methods used for the identification of earnings management in previous studies. The earnings of firms listed on the Johannesburg Securities Exchange (JSE) between 1988 and 2005 are examined, and we find a discontinuity in the distribution of earnings around zero exists irrespective of the deflators used or the definition of earnings. Hence, like their international counter parts South African firms manage their earnings usually upwards. Furthermore, we find that in a setting of earnings management to avoid a loss, deferred tax is incrementally useful to all accrual measures in identifying earnings management. When the analysis is performed where earnings are managed to avoid decline, total accruals incrementally useful to deferred tax in detecting earnings manipulation in South Africa.
Publication Year: 2007
Publication Date: 2007-12-01
Language: en
Type: article
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Cited By Count: 1
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