Predicting Earnings Management: The Case of Earnings Restatements

@inproceedings{Richardson2002PredictingEM,
  title={Predicting Earnings Management: The Case of Earnings Restatements},
  author={Scott Richardson and A. Irem Tuna and Min Wu},
  year={2002}
}
This paper examines the usefulness of accounting information in predicting earnings management. We investigate a comprehensive sample of firms from 1971-2000 that restated annual earnings. We find that firms restating earnings have high market expectations for future earnings growth and have higher levels of outstanding debt. We also find that a primary motivation for the earnings manipulation is the desire to attract external financing at a lower cost. Furthermore, our evidence suggests that… 

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