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Henselmann, K, Ditter, D and Scherr, E (2014)

Irregularities in Accounting Numbers and Earnings Management - A Novel Approach Based on SEC XBRL Filings

22nd Annual Research Workshop on Strategic and Emerging Technologies in Accounting, Auditing, and Tax, AAA Annual Meeting 2013, Anaheim, USA.

ISSN/ISBN: Not available at this time. DOI: Not available at this time.



Abstract: Motivated by the SEC XBRL mandate, this study analyzes the association between irregularities in accounting numbers and earnings management. Because XBRL-structured SEC filings enable the gathering of accounting numbers to be fully automatic in a database-like manner, the SEC XBRL mandate provides vast opportunities for financial analysis that could not be possible with traditional ways of reporting. Based on all XBRL 10-K filings submitted to the SEC for fiscal years 20092012, we find that firms just beating earnings thresholds exhibit a higher amount of abnormal digit frequencies than firms that clearly miss or beat the benchmark. Furthermore, we identify several possible monetary line items that may have been manipulated to meet the earnings thresholds. Our findings are consistent with prior studies suggesting that firms manipulate accounting numbers surrounding earnings targets. Overall, XBRL-enhanced digit analysis may offer the SEC and investors alike a novel approach to quickly and easily evaluating the reliability of the accounting numbers communicated in financial reports.


Bibtex:
@misc{, AUTHOR = {Klaus Henselmann and Dominik Ditter and Elisabeth Scherr}, TITLE = {Irregularities in Accounting Numbers and Earnings Management - A Novel Approach Based on SEC XBRL Filings}, YEAR = {2014} HOWPUBLISHED = {Technical Report}, NOTE = {22nd Annual Research Workshop on Strategic and Emerging Technologies in Accounting, Auditing, and Tax, AAA Annual Meeting 2013, Anaheim, USA}, URL = {http://ssrn.com/abstract=2297355}, }


Reference Type: Technical Report

Subject Area(s): Accounting