We present evidence that the managers of Indian firms fixate on operating profits, and thus manage such earnings. Specifically, they shift operating expenses to income-decreasing special items in order to inflate operating earnings (McVay, 2006. The Accounting Review, 81(3), 531). We also shed...

We present first evidence that the manipulation of operating cash flows through misclassification is likely to be more common in the countries with weak investor protection and governance. We also show that managers manipulate operating cash flows using different misclassification strategies....

Purpose – We examine whether firm-level corporate governance measures and regulatory reforms constrain manipulation of operating cash flows, an important firm performance indicator.Design/methodology/approach – Our sample comprises of firms from an emerging market, India with data from...

Research indicates that auditors fail to curb classification shifting in countries with relatively weaker legal institutions. However, it is not known whether auditors are unable to detect misclassifications or if they are merely not motivated to report them. We conduct two experiments to...

Acquisitions by emerging market firms of targets located in developed markets have increased drastically over the recent years. We use this setting to test Coffee's (1999) bonding hypothesis in a cross-border M&A context by examining whether acquirers adopt the corporate governance practices...

Using a sample of group affiliated and standalone firms for the years 2001-06 from India, a large emerging economy dominated by family business groups and firms with concentrated ownership, we examine the relationship between insider control and opportunistic earnings management with specific...

In this paper we construct a Corporate Governance Index for 500 large listed firms in the Indian corporate sector for the period 2003 to 2008 using information on four important corporate governance mechanisms namely, the board of director, ownership structure, audit committee, and the external...