A growing body of literature is examining the concept of real activities manipulation in various contexts. In these studies, the researcher typically models abnormal real activities and draws inferences based on the output measures. Thus, the results of the studies hinge critically on the...

We argue that managers' choice to manage earnings depends on the trade-off in the present value of expected future net benefits associated with that choice. Specifically, we examine if discount rates are associated with the likelihood that managers engage in earnings management to meet or beat...

Four new prominent asset pricing factors have recently been proposed. We test whether these factors fulfill necessary conditions for qualifying those as risk factors. We show that the investment and betting-against-beta factors fulfill these conditions. However, the profitability and quality...