840
Views
93
CrossRef citations to date
0
Altmetric
Original Articles

Earnings management of distressed firms during debt renegotiation

&
Pages 69-86 | Accepted 01 Jun 2004, Published online: 28 Feb 2012

References

  • Asquith , P. , Gertner , K. R. and Scharfstein , D. 1994 . Anatomy of financial distress: An examination of junk- bond issuers . Quarterly Journal of Economics , 109 : 625 – 679 .
  • Bank Negara Malaysia . 2000 . Annual Report , Bank Negara Malaysia .
  • Bartov , E. , Gul , F. A. and Tsui , J. S. L. 2001 . Discretionary-accruals models and audit qualifications . Journal of Accounting and Economics , 30 : 421 – 452 .
  • Becker , C. L. , DeFond , M. L. , Jiambalvo , J. and Subramanyam , K. R. 1998 . The effect of audit quality on earnings management . Contemporary Accounting Research , 15 : 1 – 24 .
  • Bergman , Y. Z. and Callen , J. L. 1991 . Opportunistic and underinvestment in debt renegotiation and capital structure' . Journal of Financial Economics , 29 : 137 – 171 .
  • Bowen , R. M , Rajgopal , S. and Venkatachalam , M. 2002 . Accounting choice, corporate governance, firm performance , USA : School of Business, University of Washington . Working paper
  • Carrol , C. , Griffith , J. M. and Rudolph , P. M. 1999 . Hostile-vs.-white-knight bidders . Managerial and Decision Economics , 20 : 163 – 171 .
  • Claessens , S. , Djankov , S. and Lang , L. 2000 . The separation of ownership and control in East Asian corporations . Journal of Financial Economics , 58 : 81 – 112 .
  • Cooke , T. E. 1998 . Regression analysis in accounting disclosure studies . Accounting and Business Research , 28 : 209 – 224 .
  • Culvenor , J. , Godfrey , J. M. and Byrne , G. 1999 . Modelling total accruals in an international environment: The impact of alternative measures of PPE . Journal of International Accounting, Auditing and Taxation , 8 : 289 – 313 .
  • DeAngelo , H. , DeAngelo , L. and Skinner , D. 1994 . Accounting choices of troubled companies . Journal of Accounting and Economics , 17 : 113 – 143 .
  • Dechow , P. , Sloan , R. and Sweeney , A. 1995 . Detecting earnings management . The Accounting Review , 70 : 193 – 225 .
  • DeFond , M. and Jiambalvo , J. 1994 . Debt covenant violation and the manipulation of accruals . Journal of Accounting and Economics , 17 : 145 – 176 .
  • Elliott , J. A. and Shaw , W. H. 1988 . Write-offs as accounting procedures to manage perceptions . Journal of Accounting Research , 26 : 91 – 119 .
  • Francis , J. R. and Krishnan , J. 1999 . Accounting accruals and auditor reporting conservatism . Contemporary Accounting Research , 16 : 135 – 165 .
  • Francis , J. J. , Hanna , D. and Vincent , L. 1996 . Causes and effects of discretionary assets write-offs . Journal of Accounting Research , 34 : 117 – 137 .
  • Giammarino , R. 1989 . The resolution of financial distress . Review of Financial Studies , 2 : 25 – 47 .
  • Gilson , S. C. 1989 . Management turnover and financial distress . Journal of Financial Economics , 25 : 241 – 262 .
  • Gilson , S. C. 1990 . Bankruptcy, boards, banks and blockholders . Journal of Financial Economics , 27 : 355 – 387 .
  • Gomez , E. T. and Jomo , K. S. 1997 . Malaysia's political economy: Politics, patronage and profits , Cambridge : Cambridge University Press .
  • Haugen , R. and Senbet , L. 1978 . The insignificance of bankruptcy costs to the theory of optimal capital structure . Journal of Finance , 35 : 383 – 393 .
  • Healy , P. M. 1985 . The effect of bonus schemes on accounting decisions . Journal of Accounting and Economics , 7 : 85 – 107 .
  • Healy , P. M. and Wahlen , J. M. 1999 . A review of the earnings management literature and its implications for standard setting . Accounting Horizons , 13 : 365 – 383 .
  • Hirst , D. E. 1994 . Auditor sensitivity to earnings management . Contemporary Accounting Research , 11 : 405 – 22 .
  • Holland , J. 1994 . Bank lending relationships and the complex nature of bank-corporate relations . Journal of Business Finance and Accounting , 21 : 367 – 393 .
  • Hribar , P. and Collins , D. W. 2002 . Errors in estimating accruals: Implications for empirical research . Journal of Accounting Research , 40 : 105 – 134 .
  • Iskander , M. , Meyerman , G. , Gray , D. F. and Hagan , S. 1999 . Corporate restructuring and governance in East Asia . Finance and Development , 6 : 42 – 45 .
  • Jaggi , B and Lee , P. 2002 . Earnings management response to debt convenant violations and debt restructuring . Journal of Accounting, Auditing & Finance , 17 ( 4 ) : 295 – 324 .
  • Jarque , C. M. and Bera , A. K. 1987 . A test for normality of observations and regression residuals . International Statistical Review , 55 : 163 – 172 .
  • Jensen , M. C. 1989 . The eclipse of the public corporation . Harvard Business Review , 67 : 61 – 74 .
  • Jeter , D. C. and Shivakumar , L. 1999 . Cross-sectional estimation of abnormal accruals using quarterly and annual data: Effectiveness in detecting event-specific earnings management . Accounting and Business Research , 29 : 299 – 319 .
  • Johl , S. , Jubb , C. A. and Houghton , K. A. Audit quality: earnings management in the context of the 1997 Asian crisis . Paper presented at the AFAANZ Conference . Brisbane , , Australia
  • Jones , J. 1991 . Earnings management during import relief investigation . Journal of Accounting Research , 29 : 193 – 228 .
  • Johnson , S. and Mitton , T. 2003 . Cronyism and capital controls: Evidence from Malaysia . Journal of Financial Economics , 67 : 351 – 382 .
  • Kasznik , R. 1999 . On association between voluntary disclosure and earnings management . Journal of Accounting Research , 37 : 57 – 81 .
  • Kothari , S. P. , Leone , A. J. and Wasley , C. E. 2001 . Performance matched discretionary accruals , University of Rochester . Working paper
  • Kothari , S. P , Laguerre , T. E. and Leone , A. J. 2002 . Capitalization versus expensing: Evidence on the uncertainty of future earnings from capital expenditure versus R&D outlays . Review of Accounting Studies , 7 ( 4 ) : 355 – 382 .
  • LaSalle , R. E. , Jones , S. K. and Jain , R. 1993 . The association between executive succession and discretionary accounting changes: Earnings management or different perspectives? . Journal of Business Finance and Accounting , 20 : 653 – 671 .
  • Lim , S. and Matolcsy , Z. 1999 . Earnings Management of Firms Subjected to Product Price Controls . Accounting and Finance , 39 : 131 – 150 .
  • Mian , S. 2001 . On the choice and replacement of chief financial officers . Journal of Financial Economics , 60 : 143 – 175 .
  • Moore , M. 1973 . Management changes and discretionary accounting decisions . Journal of Accounting Research , 11 : 100 – 107 .
  • Montgomery , D and Peck , E. 1992 . Introduction to Linear Regression Analysis , New York : John Wiley and Sons .
  • Murphy , K. J. and Zimmerman , J. L. 1993 . Financial performance surrounding CEO turnover . Journal of Accounting and Economics , 16 : 273 – 315 .
  • Navissi , F. 1999 . Earnings Management under Price Regulation . Contemporary Accounting Research , 16 : 281 – 304 .
  • Noe , T. H. and Wang , J. 2000 . Strategic debt restructuring . The Review of Financial Studies , 13 : 985 – 1015 .
  • Peasnell , K. V. , Pope , P. F. and Young , S. 2000 . Accrual management to meet earnings targets: U.K. evidence pre-and post-Cadbury . British Accounting Review , 32 : 415 – 445 .
  • Peltier-Rivest , D. 1999 . The determinants of accounting choices in troubled companies . Quarterly Journal of Business and Economics , 38 : 28 – 44 .
  • Pourciau , S. 1993 . Earnings management and non-routine executive changes . Journal of Accounting and Economics , 16 : 273 – 315 .
  • Rees , L. , Gill , S. and Gore , R. 1996 . An investigation of asset write-downs and concurrent abnormal accruals . Journal of Accounting Research , 34 : 157 – 169 .
  • Rosner , R. L. 2003 . Earnings manipulation in failing firms . Contemporary Accounting Research , 20 : 361 – 408 .
  • Shivakumar , L. 2000 . Do firms mislead investors by overstating earnings before seasoned equity offerings? . Journal of Accounting and Economics , 29 : 339 – 371 .
  • Shleifer , A. and Vishny , R. 1992 . Liquidation values and debt capacity: A market equilibrium approach . Journal of Finance , 47 : 1343 – 1366 .
  • Smith , M. , Kestel , J. and Robinson , P. 2001 . Economic recession, corporate distress and income increasing accounting policy choice . Accounting Forum , 25 : 334 – 352 .
  • Sweeney , A. P. 1994 . Debt-covenant violations and managers' accounting responses . Journal of Accounting and Economics , 17 : 281 – 308 .
  • Vuong , Q. 1989 . Likelihood ratio test for model selection and non-nested hypothesis . Econometrica , 57 : 307 – 333 .
  • Warner , J. , Watts , R. and Wruck , K. 1988 . Stock prices and top management changes . Journal of Financial Economics , 20 : 461 – 492 .
  • Watts , R. L. and Zimmerman , J. L. 1986 . Positive Accounting Theory , Englewood Cliff , NJ : Prentice Hall .
  • Weisbach , M. 1988 . Outside directors and CEO turnover . Journal of Financial Economics , 20 : 431 – 460 .
  • Young , S. 1998 . The determinants of managerial accounting policy choice: Further evidence for the UK . Accounting and Business Research , 28 : 131 – 143 .
  • Young , S. 1999 . Systematic measurement error in the estimation of discretionary accruals: An evaluation of alternative modeling procedures . Journal of Business Finance and Accounting , 26 : 833 – 862 .

Reprints and Corporate Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

To request a reprint or corporate permissions for this article, please click on the relevant link below:

Academic Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

Obtain permissions instantly via Rightslink by clicking on the button below:

If you are unable to obtain permissions via Rightslink, please complete and submit this Permissions form. For more information, please visit our Permissions help page.