Disclosure Timing and Real Earnings Management

• In Event: Financial Accounting and Reporting 4

Abstract

Using 14,721 firm-years observations from 1997-2011, this study investigates the association between firms that file forms NT 10-K, according to the SEC Rule No. 12b-25, and real earnings management. The preliminary results suggest a significant association between late filers and abnormal discretionary expenses, suggesting the existence of real earnings manipulations among late filers. The results also suggest that firms that file financial statements after the fiscal year end but do not necessarily end up filing the form NT 10-K, are also manipulating real earnings management through abnormal production costs and discretionary expenses. The empirical results in this paper are of interest to policy makers and academicians as they point to a possible link between late filing and financial reporting quality.

Author

• Dina F El-Mahdy, Morgan State University