Earnings Management to Exceed Thresholds - Harvard · PDF file8GTUKQP˝/C[ ˙˙ˆ...

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Transcript of Earnings Management to Exceed Thresholds - Harvard · PDF file8GTUKQP˝/C[ ˙˙ˆ...

Page 1: Earnings Management to Exceed Thresholds - Harvard · PDF file8GTUKQP˝/C[ ˙˙ˆ (QTVJEQOKPI˝,QWTPCNQH$WUKPGUU ,CPWCT[ ˙˙˙ Earnings Management to Exceed Thresholds (TCPQKU&GIGQTIG

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Page 2: Earnings Management to Exceed Thresholds - Harvard · PDF file8GTUKQP˝/C[ ˙˙ˆ (QTVJEQOKPI˝,QWTPCNQH$WUKPGUU ,CPWCT[ ˙˙˙ Earnings Management to Exceed Thresholds (TCPQKU&GIGQTIG

Abstract

'CTPKPIU�RTQXKFG�KORQTVCPV�KPHQTOCVKQP�HQT�KPXGUVOGPV�FGEKUKQPU���6JWU

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Page 3: Earnings Management to Exceed Thresholds - Harvard · PDF file8GTUKQP˝/C[ ˙˙ˆ (QTVJEQOKPI˝,QWTPCNQH$WUKPGUU ,CPWCT[ ˙˙˙ Earnings Management to Exceed Thresholds (TCPQKU&GIGQTIG

I. Introduction

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Page 4: Earnings Management to Exceed Thresholds - Harvard · PDF file8GTUKQP˝/C[ ˙˙ˆ (QTVJEQOKPI˝,QWTPCNQH$WUKPGUU ,CPWCT[ ˙˙˙ Earnings Management to Exceed Thresholds (TCPQKU&GIGQTIG

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Appendix

Testing For A Discontinuity in A Univariate Distribution

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References

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I. Distribution of EPS.Exploring Threshold ofPositive Earnings (1¢/share)

II. Distribution of ∆EPS.Exploring Threshold ofPrevious Period’s Earnings

III. Distribution of ForecastErrors (FERR).Exploring Threshold ofAnalysts’ Forecast (AF).

Conditioned on: ∆EPS<0 &lag(EPS)>5. (τ = 5.70)

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