Earnings manipulation, pension assumptions, and managerial investment decisions

• 成果类型: Article
• 署名作者: Bergstresser, D; Desai, M; Rauh, J
• 署名单位: Harvard University; National Bureau of Economic Research; University of Chicago
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• 发表日期: 2006
• 页码: 157-195
• 关键词: corporate; management; taxes; FIRMS

摘要

Managers appear to manipulate firm earnings through their characterizations of pension assets to capital markets and alter investment decisions to justify, and capitalize on, these manipulations. Managers are more aggressive with assumed long-term rates of return when their assumptions have a greater impact on reported earnings. Firms use higher assumed rates of return when they prepare to acquire other firms, when they are near critical earnings thresholds, and when their managers exercise stock options. Changes in assumed returns, in turn, influence pension plan asset allocations. Instrumental variables analysis indicates that 25 basis point increases in assumed rates are associated with 5 percent increases in equity allocations.