Customer Bargaining Power and Accrual-Based Earnings Management

Authors

  • Tanweer Hasan Independent University
  • Kevin Berry Northern Michigan University
  • Stacy Boyer-Davis Northern Michigan University

DOI:

https://doi.org/10.33423/jaf.v21i4.4527

Keywords:

accounting, finance, earnings management, customer bargaining, accrual management, financial reporting

Abstract

The present study provides a comprehensive analysis of the relationship between customer bargaining power and accrual-based earnings management using a sample of United States (U.S.) firms, with 16,084 firm-year observations, over the period 2000-2016. The absolute value of residuals from the modified-Jones model as described in Dechow et al. (1995) and the Kothari et al. (2005) models, respectively, were used as the proxy variable for the quality of accruals of a company. Results from the multivariate analysis, after controlling for firm-specific and market-specific variables, indicated that firms with high customer bargaining seem to engage more in opportunistic accrual management activities.

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Published

2021-08-31

How to Cite

Hasan, T., Berry, K., & Boyer-Davis, S. (2021). Customer Bargaining Power and Accrual-Based Earnings Management. Journal of Accounting and Finance, 21(4). https://doi.org/10.33423/jaf.v21i4.4527

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Section

Articles