The impact of free cash flow, financial leverage and accounting regulation on earnings management in Australia’s “old” and “new” economies

Managerial Finance - Tập 27 Số 12 - Trang 18-39 - 2001
StewartJones1, RohitSharma2
1Deakin University, 221 Burwood Highway, Burwood, VIC, 3125, Australia
2Institute of Chartered Accountants in Australia, BHP House, 500 Burke St., Melbourne, Vic 3000, Australia

Tóm tắt

Outlines the rapid growth of “new economy” companies in Australia and compares their levels of earnings management with “old economy” firms, using data on all Australian listed companies. Reviews the relevant research, explains the methodology and presents the results. Shows that the old economy firms do engage in significant earnings management which is positively associated with leverage and free cash flow levels but, surprisingly, that this is far less evident in the new economic sector. Considers consistency with other research, the underlying reasons for the findings (including regulatory constraints) and opportunities for further research.

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Managerial Finance

Tập 27 Số 12

18-39

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