Does the Sarbanes-Oxley Act Impact on Accrual and Real Earnings Managements in Japanese Firms?
Masumi Nakashima, Fukushima College ABSTRACT: This study investigates the impact of Sarbanes-Oxley Act of 2002 (SOX) on earnings management of the U.S. listed Japanese firms and determinants of changes in earnings management in the pre- and post-SOX periods. I focus on conservative management, neutral management , and aggressive management as accruals management proxies, and abnormal operating cash flows and abnormal production costs as real management proxies. I find that decreases in accruals management and increases in real management and an exchange of accruals management for real management after SOX occurs. Therefore, capital market motivations are negatively associated with accruals management and positively associated with real management. In addition, I document the significant impact of bank-oriented governance on decreases in real management after SOX. While stock market motivations drive the shift from accruals management to real management, leverage is likely to affect ear
Related Questions
- Even though an employer is not required to pay for leave under the Act, what about continuation of health care benefits, vacation accrual time, holiday pay, pension accrual time and other benefits?
- Does the Sarbanes-Oxley Act Impact on Accrual and Real Earnings Managements in Japanese Firms?
- What is the Hard-Rock Mining Impact Act?
