Testing for Earnings Management in the U.S. Amid the COVID-19 Pandemic

Authors

  • Charles E. Jordan Florida State University – Panama City
  • Stanley J. Clark Middle Tennessee State University
  • Marilyn A. Waldron University of Sydney

DOI:

https://doi.org/10.33423/jabe.v23i5.4559

Keywords:

business, economics, earnings management, pandemic, COVID-19

Abstract

Some forms of earnings management largely disappeared after SOX’s implementation, including cosmetic earnings management and the upward manipulation of income to ensure that reported EPS is rounded up a penny rather than down a cent. Yet, research shows that the incidence of accrual-based earnings management increases during an economic downturn. This raises a question of whether these two types of earnings management might have reappeared in the U.S. during the unique, pandemic-driven recession of 2020. The current study tests this issue and finds no compelling evidence that either of these two easilyachieved forms of earnings management occurred overall in 2020.

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Published

2021-09-16

How to Cite

Jordan, C. E., Clark, S. J., & Waldron, M. A. (2021). Testing for Earnings Management in the U.S. Amid the COVID-19 Pandemic. Journal of Applied Business and Economics, 23(5). https://doi.org/10.33423/jabe.v23i5.4559

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Section

Articles