We investigate, using data on US manufacturing firms, how and when corporate governance affects managers’ decisions to use discretionary accruals and thereby artificially influence company financial reports. We employ 3SLS to study the relationship between financial status, corporate...

Purpose – The purpose of this paper is to investigate, using data on US manufacturing firms, how and when corporate governance affects managers' decisions to use discretionary accruals and thereby artificially influence company financial reports. Design/methodology/approach – Three‐stage...

Purpose – The purpose of this paper is to investigate, using data on US manufacturing firms, how and when corporate governance affects managers' decisions to use discretionary accruals and thereby artificially influence company financial reports. Design/methodology/approach – Three-stage...