Income Smoothing through R&D Management and Earnings Informativeness
成果类型：
Article
署名作者：
Baik, Bok; Gunny, Katherine A.; Jung, Boochun; Park, Duri
署名单位：
Seoul National University (SNU); Children's Hospital Colorado; University of Colorado System; University of Colorado Anschutz Medical Campus; University of Colorado Denver; University of Hawaii System; University of Hawaii Manoa; Sogang University
刊物名称：
ACCOUNTING REVIEW
ISSN/ISSBN：
0001-4826
DOI：
10.2308/TAR-2018-0692
发表日期：
2022
页码：
25-49
关键词：
摘要：
We examine whether income smoothing via R&D management is associated with more informative earnings. While the literature finds earnings smoothing through accruals improves earnings informativeness, it is unclear whether smoothing through R&D management is used to inform investors because R&D management is relatively more difficult to detect and curb. We find that R&D management, which represents a subset of real activities management, is associated with more informative earnings, but the association is weaker relative to smoothing through accruals. We also document that R&D-based smoothing is associated with more accurate and less disperse analyst forecasts of earnings, but the association is weaker relative to smoothing through accruals. Overall, we provide novel evidence suggesting that managers use R&D management to smooth temporary shocks to earnings and inform investors.