Transaction-based lending and real earnings management

IF 1.9 Q2 BUSINESS, FINANCE Managerial Finance Pub Date : 2023-12-20 DOI:10.1108/mf-12-2022-0581

Stephen Gray, Arjan Premti

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Abstract

Purpose

The purpose of this study is to examine how lenders alter their behavior when faced with real earnings management.

Design/methodology/approach

This study uses the incremental R-square approach as in Kim and Kross (2005) to examine how much lenders rely on income statement and balance sheet ratios as the degree of real earnings management increases.

Findings

As real earnings management affects mostly the income statement, the authors find that lenders rely less on income statement ratios in making credit decisions in the presence of real earnings management. The authors also find that lenders do not alter their reliance on balance sheet ratios when faced with real earnings management.

Originality/value

This paper is the first to study how lenders alter their reliance on financial statements in making credit decisions in the presence of real earnings management. The findings of this paper could help the regulators set standards to improve the usefulness of financial statements. The findings of this paper could also help practitioners (borrowers and lenders) understand how real earnings management affects credit decisions.

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基于交易的贷款和实际收益管理

本研究采用 Kim 和 Kross（2005 年）中的增量 R-平方法来研究当实际收益管理程度增加时，贷款人对损益表和资产负债表比率的依赖程度。研究结果由于实际收益管理主要影响损益表，作者发现在实际收益管理的情况下，贷款人在做出信贷决策时对损益表比率的依赖程度降低。作者还发现，贷款人在面临实际收益管理时不会改变对资产负债表比率的依赖。本文的研究结果有助于监管机构制定标准，提高财务报表的实用性。本文的研究结果还有助于从业人员（借款人和贷款人）了解真实收益管理如何影响信贷决策。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Managerial Finance BUSINESS, FINANCE-

CiteScore

3.30

自引率

12.50%

发文量

103

期刊介绍： Managerial Finance provides an international forum for the publication of high quality and topical research in the area of finance, such as corporate finance, financial management, financial markets and institutions, international finance, banking, insurance and risk management, real estate and financial education. Theoretical and empirical research is welcome as well as cross-disciplinary work, such as papers investigating the relationship of finance with other sectors.