Income management practices of UK companies : an empirical and theoretical investigation

This thesis reports the results of more than three years research into the income management practices of UK companies. It reviews the relevant research literature, analyses the theoretical issues which underpin the empirical investigation, derives a testable hypothesis and conducts a large-scale empirical test of the hypothesis. The research methodology used builds on and extends the methodology of previous researchers. Thus innovations are introduced into (a) the design of income generating expectancy models, and (b) the tests used to detect 'income management' practices. The results of the investigation are that:(a) the practice of income management may be widespread throughout UK companies; and (b) income smoothing is not commonly practiced by UK companies. These findings may have implications for directing the efforts of future income management research. They should also be of interest to all users of published company accounts. Analysts and accounting regulators in particular may find them to be important in establishing their strategic objectives.