Bondholder and stockholder reactions to discretionary accounting changes |
| |
| Institution: | 1. Iranian National Institute for Oceanography and Atmospheric Science (INIOAS), No. 3, Etemadzadeh St., Fatemi Ave., 1411813389 Tehran, Iran;2. Department of Chemistry, Faculty of Science, University of Zanjan, Postal Code 45371-38791 Zanjan, Iran;3. Department of Fisheries, Faculty of Agriculture and Natural Resources, Gonbad Kavoos University, Gonbad Kavoos, Iran;4. Department of Marine Science and Technology, Science and Research Branch, Islamic Azad University, Tehran, Iran;5. Novin Shimyar Chemical Laboratory, P.O. Box 14589-3699, Tehran, Iran;6. Department of Environmental Science, Faculty of Environment and Energy, Science and Research Branch, Islamic Azad University, Tehran, Iran;7. Department of Chemistry, Payame Noor University, P.O. Box 19395-3697, Tehran, Iran;8. Chemical Engineering Department, Faculty of Engineering, Shomal University, PO Box 731, Amol, Mazandaran, Iran;1. School of Finance, Guangdong University of Finance & Economics, No. 21 Luntou Road, Guangzhou 510320, China;2. Alliance Manchester Business School, University of Manchester, Booth Street West, Manchester M13 9SS, UK;3. I.H. Asper School of Business, University of Manitoba, 416 Drake Centre, Winnipeg, MB R3T 5V4, Canada |
| |
| Abstract: | This study examines bondholder and stockholder reactions to discretionary accounting changes that increase reported income to determine whether the changes are associated with a wealth transfer from bondholders to stockholders or with a loss in the wealth of both groups of investors. The evidence supports the wealth loss hypothesis. Negative relative returns to bondholders and stockholders appear to be related to the accounting changes after controlling the effects of earnings. The study examines earnings, management compensation, and debt covenant variables as possible motives for the accounting changes. It finds systematic differences between the change companies and matched nonchange companies on all three variables. The profile data are consistent with a setting in which managers use accounting changes to boost reported income and their own compensation during poor years. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
