Testing for Earnings Management in the U.S. Amid the COVID-19 Pandemic

2021 Journal of Applied Business and Economics  
Some forms of earnings management largely disappeared after SOX's implementation, including cosmetic earnings management and the upward manipulation of income to ensure that reported EPS is rounded up a penny rather than down a cent. Yet, research shows that the incidence of accrual-based earnings management increases during an economic downturn. This raises a question of whether these two types of earnings management might have reappeared in the U.S. during the unique, pandemic-driven
more » ... of 2020. The current study tests this issue and finds no compelling evidence that either of these two easilyachieved forms of earnings management occurred overall in 2020.
doi:10.33423/jabe.v23i5.4559 fatcat:25drjjj76rfvrei4vxcftcszqe