ACCOUNTING DISCRETION AND EARNINGS MANAGEMENT

ABSTRACT. Bowen et al. examine the cross-sectional relation between an aggregate index of accounting discretion and governance quality after controlling for other economic determinants of accounting discretion such as firm size, leverage, growth opportunities, risk, performance and stakeholder claims. Tan and Jamal conduct an experiment in which opportunistic and value-maximizing managers are given different levels of accounting discretion to report smooth increasing earnings over time.