We contribute to the earnings management literature and provide insights for accounting regulatorsby investigating the impact of FRS3 on accruals management by UK firms. FRS3 mandated net incomeper share, whilst allowing the release of incremental information on sustainable profitability....

This paper provides new UK evidence on the relationship between managerialincentives and firm risk using a hand-collected database of 3307 executive yearobservations (698 CEO years and 2609 other executive years). We find that therelation between pay performance sensitivity and firm risk...

We examine whether UK firms engage in earnings management or forecast guidance over theperiod 1994−2002 in order to ensure that their reported earnings meet analyst earnings expectations.We explore two earnings management mechanisms: a) the use of positive abnormal working capitalaccruals and...

We explore the capital market consequences of achieving analyst earnings expectations,distinguishing between expectations achieved genuinely or through earnings guidance ormanagement. We examine an inclusive set of earnings management tools: real earningsmanagement, working capital accruals...

We document accounting quality improvements following voluntary IFRS adoption.However, we find no evidence of such improvements subsequent to mandatory adoptionby firms that resist IFRS adoption. We exploit a unique setting in Germany where firmscould voluntarily adopt IFRS before mandatory...