Insider trading and earnings management (EM) have traditionally been associated with fraud and corporate scandals. Corporations involved in fraudulent financial reporting or earnings manipulations were assumed to have used insider trading patterns to manipulate earnings, thereby concealing information from investors. The purpose of this quantitative, non-experimental study was to examine the association between insider trading patterns and EM citations among a randomly selected sample of publicly traded companies. The research question pertained to the association between the number of EM citations and whether a firm exhibited patterns of insider trading among publicly traded firms. The theoretical framework was based on accounting, auditing and financial theories. Archival data were collected in the form of financial statements from annual reports of 77 companies submitted to the Securities and Exchange Commission. A multiple linear regression was used to answer the research question to determine whether there was an association between insider trading patterns and EM. Results of descriptive statistics and regression analysis revealed that, after controlling for the firm size, a significant association existed between the number of EM citations and patterns of insider trading in the sample of publicly traded firms. A positive relationship, wherein firms with patterns of insider trading had more EM citations as indicated from the regression results. These findings may encourage investors, regulators, auditors, the public, and other interested parties to work with researchers to foster confidence in financial markets and the accounting profession, and to redeem the mistakes made by companies in the past.

A research report presented in partial fulfillment (50%) of the requirements for the degree of Master of Commerce in Business Economics (Finance) in the School of Economic and Business Sciences at the University of the Witwatersrand, Johannesburg September 2017 / Utilising the seminal work of Sloan (1996) this study investigates the accrual anomaly in South Africa. Utilising all firms listed on the All Share Index (ALSI) for the period 2002 to 2016, this study employs various tests surrounding the accrual anomaly. A regression analysis highlights a low persistence of earnings and the popular Mishkin (1983) test fails to prove a sufficient market reaction following changes in earnings. Accruals could pre-empt dramatic changes in future earnings but the observed stock price adjustment was only implicit in firms that suffered a drop in earnings. Additionally, the presence of post-earnings announcement drift (PEAD) meant the market reaction following an earning’s announcement was gradually reflected in the stock price. The accrual anomaly relies on an overreaction following an earning’s surprise in the month that financials are released. All the previously mentioned meant that a simple fundamental-based (cash flow) investment strategy far outperformed a strategy based on earnings’ fixation (accruals). This study failed to find conclusive evidence of the accrual anomaly on the JSE. / MT 2018

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Aktiebolagslagen (2005:551) 4 kap. 5§ är ett avsteg från likhetsprincipen eftersom aktier med olika röstvärden tillåts. Vi undersöker om svenska noterade företag med röststarka aktier använder mer eller mindre resultatmanipulation än andra företag. Eftersom ägare i företag med röststarka aktier enklare kan erhålla kontroll torde agentproblem mellan företagsledning och ägare minska. Dock riskerar nya agentproblem uppstå mellan kontrollerande ägare och minoritetsägare. Dessutom värderas företag med röststarka aktier lägre än andra företag, vilket skapar incitament att sänka kostnaden för eget kapital genom resultatmanipulation. Vi undersöker resultatmanipulation med tre mått för periodiseringsbaserad respektive operativ resultatmanipulation. Resultaten indikerar att företag med röststarka aktier använder mer periodiseringsbaserad resultatmanipulation än andra företag. Däremot illustrerar operativ resultatmanipulation en tvetydig bild. Vi uppmanar att dessa operationella mått tolkas med försiktighet, då åtgärder kan drivas av olika bakomliggande motiv.

In response to the reported increase in accounting crime and suspected fraud in conjunction with the adjustment subsidies initialized during the covid-19 pandemic of 2020, we conducted a study examining accounting manipulation. Based on an explanatory theory for fraud, the Fraud Triangle, we theorize that the financial circumstances that companies experienced during the pandemic and the government subsidies created an environment where accounting manipulation could occur. We obtained a unique set of unpublished data from the Swedish Tax Agency. Two common models for detecting accounting manipulation were then applied to a large sample of Swedish companies. We used a version of the Jones Model to detect potential earnings management and Benford’s Law to detect fraudulent manipulation of the firms’ reported loss of revenue. Our results indicate earnings management and fraudulent reporting for some industries but no broad indication of systematic accounting manipulation across all industries. However, we suggest future research on this topic to further understand how accounting manipulation occurs in distressed industries.

Earnings management is widely implemented by managers, which may be the result of weak monitoring. This study is based on 140 companies to capture the effect of shareholder activism (proxied by shareholder proposals) on earnings management. This study adds to the literature by focusing on how the presence of foreign directors on the board moderates this relationship. This study investigatesthe influence of foreign directors by taking the proportion of foreign directors, as well as by measuring the regulation distance of their home countries to the U. S. The result from the empirical analyses implies that shareholder activism can lead to a lower level of earnings management due to improved monitoring. A higher proportion of foreign directors and a closer regulation distance of their home countries to the U. S do not help shareholder activists to reduce earnings management. Decreasing monitoring effectiveness leads to a higher level of earnings management.

Sammanfattning Titel: Resultatmanipulering bland svenska aktiebolag åren innan konkurs. Nivå: Examensarbete på grundnivå (kandidatexamen) i ämnet företagsekonomi Författare: Mohammed Nader Hamidi och David NgodaHandledare: Jan SvanbergDatum: 2023 – januari Syfte: Studiens syfte är att undersöka om svenska aktiebolag resultatmanipulerarår innan konkurs och ifall de använder sig av en positiv eller negativresultatmanipulering år innan konkurs. Och om resultatmanipulering berorpå kapitalintensitet samt företagsstorlek under åren innan konkurs. Metod: Studien tillämpar en kvantitativ undersökning där sekundärdata från åren2010–2020 samlats in från databasen Retriever Business. Denna studie har använt sig av den modifierade Jones-modellen för att mäta onormalaperiodiseringar som en proxy, för att mäta resultatmanipulering. SPSS ochExcel användes för att ta fram alla beräkningar, som är grunden tillstudiens resultat och slutsats. Resultat & slutsats Resultatet från denna undersökning till skillnad från tidigare studie visaratt svenska aktiebolag inte manipulerar resultat år innan konkurs.Dessutom har denna studie till skillnad från tidigare studier funnit attresultatmanipulering inte beror på kapitalintensitet samt företagsstorlekåren innan konkurs bland svenska aktiebolag. Bidrag: Denna undersökning kan bidra med en ökad förståelse för hurredovisningsnormerna kan utvecklas och reformeras för att stävjauppkomsten av resultatmanipulation för exempelvis reglerare ochinvesterare i Sverige. Fortsatt forskning: Ett förslag till fortsatt forskning kan vara att exempelvis använda olikamodeller i mätningen av resultatmanipulation, detta för att få ett bredareperspektiv. Ett annat förslag kan vara att även använda svenskabörsnoterade aktiebolag i fortsatt forskning. Nyckelord: Diskretionära periodiseringar, Earnings management, konkurs, denmodifierade Jones-modellen, redovisning, periodiseringar.

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