Initial losses, corporate governance and earnings management

dc.check.embargoformatNot applicableen
dc.check.infoNo embargo requireden
dc.check.opt-outNoen
dc.check.reasonNo embargo requireden
dc.check.typeNo Embargo Required
dc.contributor.advisorDonnelly, Raymonden
dc.contributor.authorMulcahy, Mark Brendan
dc.date.accessioned2013-10-03T16:26:05Z
dc.date.available2013-10-03T16:26:05Z
dc.date.issued2013
dc.date.submitted2013
dc.description.abstractThis thesis examines the relationship between initial loss events and the corporate governance and earnings management behaviour of these firms. This is done using four years of corporate governance information spanning the report of an initial loss for companies listed on the UK Stock Exchange. An industry- and sizematched control sample is used in a difference-in-difference analysis to isolate the impact of the initial loss event during the period. It is reported that, in general, an initial loss motivates an improvement in corporate governance in those loss firms where a relative weakness existed prior to the loss and that these changes mainly occur before the initial loss is announced. Firms with stronger (i.e. better quality) corporate governance have less need to alter it in response to the loss. It is also reported that initial loss firms use positive abnormal accruals in the year before the loss in an attempt to defer/avoid the loss — the weaker corporate governance the more likely is it that loss firms manage earnings in this manner. Abnormal accruals are also found to be predictive of an initial loss and when used as a conditioning variable, the quality of corporate governance is an important mitigating factor in this regard. Once the loss is reported, loss firms unwind these abnormal accruals although no evidence of big-bath behaviour is found. The extent to which these abnormal accruals are subsequently unwound are also found to be a function of both the quality of corporate governance as well as the severity of the initial loss.en
dc.description.statusNot peer revieweden
dc.description.versionAccepted Version
dc.format.mimetypeapplication/pdfen
dc.identifier.citationMulcahy, M.B. 2013. Initial losses, corporate governance and earnings management. PhD Thesis, University College Cork.en
dc.identifier.endpage340
dc.identifier.urihttps://hdl.handle.net/10468/1240
dc.language.isoenen
dc.publisherUniversity College Corken
dc.rights© 2013, Mark B. Mulcahyen
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/en
dc.subjectLossesen
dc.subjectEarnings managementen
dc.subjectDifference-in-differencesen
dc.subject.lcshCorporate governanceen
dc.subject.lcshAccrual basis accounting--Great Britainen
dc.subject.lcshFinancial Management.en
dc.thesis.opt-outfalse
dc.titleInitial losses, corporate governance and earnings managementen
dc.typeDoctoral thesisen
dc.type.qualificationlevelDoctoralen
dc.type.qualificationnamePhD (Commerce)en
ucc.workflow.supervisorrdonnelly@ucc.ie
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