This paper summarizes the growing body of literature on the unique aspects of real earnings management as compared with accruals earnings management. Unlike accruals earnings management, real earnings management involves real business activities, consumes resources, and potentially affects...

We examine the effect of R&D REM, a form of real earnings management (REM) by cutting research and development (R&D) expenditures abnormally to meet earnings targets, on firms' subsequent innovation productivity measured by the scale and the novelty of patents. In the within-firm analysis, we...

We investigate whether investors are misled by firms that exclude particular expenses in calculating non-GAAP earnings in order to beat analysts' earnings forecasts. Our empirical analyses suggest that firms that pursue a strategy of non-GAAP reporting to beat analysts' earnings forecasts not...