Enhancing credit ratings with earnings management - Empirical analysis of real and accrual-based earnings management and their effects on credit ratings in Finnish listed companies during 2004 - 2012

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dc.contributor Aalto-yliopisto fi
dc.contributor Aalto University en
dc.contributor.author Karvonen, Konsta
dc.date.accessioned 2015-11-04T13:21:13Z
dc.date.available 2015-11-04T13:21:13Z
dc.date.issued 2015
dc.identifier.uri https://aaltodoc.aalto.fi/handle/123456789/18381
dc.description.abstract This study examines whether Finnish publicly listed companies are able to affect their credit ratings with earnings management. Earnings management is analyzed by both real and accrual-based earnings management activities. The study also examines whether the financial crisis of 2008 has an effect on the relationship between credit ratings and earnings management. The study is a quantitative one and uses OLS regression to investigate changes in the level of earnings management. Real earnings management is studied by examining sales manipulation, overproduction, and discretionary expenditures. Accrual-based earnings management is studied by using the Modified Jones model. The sample consists of companies publicly quoted in NASDAQ OMX Helsinki during 2004 - 2012. The results imply that Finnish publicly listed companies are able to enhance their credit ratings to some extent with both real and accrual-based earnings management, the former being more useful. Furthermore, earnings management is more utilized in enhancing low credit ratings. All findings on the financial crisis and its effect on the relationship between credit ratings and earnings management are not statistically significant, although some indications can be found. The financial crisis does not seem to affect the ability of the financial indicators used in this study to explain given credit ratings. Thus, the credit rating agency's behavior and ability to give credit ratings does not seem to change due the financial crisis. The use of overproduction and accruals manipulation to enhance credit ratings increase slightly during 2008 - 2012, while the use of sales manipulation and discretionary expenditures decrease during the same time period. en
dc.format.extent 55
dc.language.iso en en
dc.title Enhancing credit ratings with earnings management - Empirical analysis of real and accrual-based earnings management and their effects on credit ratings in Finnish listed companies during 2004 - 2012 en
dc.type G2 Pro gradu, diplomityö fi
dc.contributor.school Kauppakorkeakoulu fi
dc.contributor.school School of Business en
dc.contributor.department Laskentatoimen laitos fi
dc.contributor.department Department of Accounting en
dc.subject.keyword earnings management
dc.subject.keyword real earnings management
dc.subject.keyword accrual-based earnings management
dc.subject.keyword credit rating
dc.subject.keyword sales manipulation
dc.subject.keyword overproduction
dc.subject.keyword discretionary expenditures
dc.identifier.urn URN:NBN:fi:aalto-201511054952
dc.type.dcmitype text en
dc.programme.major Accounting en
dc.programme.major Laskentatoimi fi
dc.type.ontasot Master's thesis en
dc.type.ontasot Pro gradu tutkielma fi
dc.subject.helecon laskentatoimi
dc.subject.helecon accounting
dc.subject.helecon tulos
dc.subject.helecon return
dc.subject.helecon luotto
dc.subject.helecon credit
dc.subject.helecon maksuvalmius
dc.subject.helecon corporate liquidity
dc.subject.helecon arviointi
dc.subject.helecon evaluation
dc.subject.helecon pörssiyhtiöt
dc.subject.helecon exchange-listed companies
dc.ethesisid 14055
dc.date.dateaccepted 2015-06-10
dc.location P1 I


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