Earnings management and corporate governance

2014 Fiscal Year Final Research Report

• Project/Area Number: 23730427
• Research Category: Grant-in-Aid for Young Scientists (B)
• Allocation Type: Multi-year Fund
• Research Field: Accounting
• Research Institution: Tohoku University
• Principal Investigator: KIMURA Fumihiko 東北大学, 経済学研究科(研究院), 准教授 (10329691)
• Project Period (FY): 2011-04-28 – 2015-03-31
• Keywords: 利益マネジメント / 実証主義的会計研究 / コーポレートガバナンス

Outline of Final Research Achievements

This study was performed to clarify the relationship the change of corporate governance and managerial accounting behaviors in Japanese listed firms.
First, I investigate the relationship between managerial myopic research and development (R&D) investment behavior and corporate governance structure in Japanese and the U. S. listed firms. The results show that: (1) in the U. S. listed firms, institutional ownership tend to prevent managers from cutting R&D investment in order to meet target earnings, and (2) such tendency is not found in Japanese firms. Moreover, I show that there is a significant difference in the level of earnings management among industries as categorized by the Securities Identification Code Committee (33 sectors), and that (1) governmental regulation, (2) firm size, (3) financing methods, and (4) accounting flexibility determine these differences.

Free Research Field

会計学