The effects of SFAS 123R on earnings management

Seung Won Lee

doi:10.1002/jcaf.22589

The effects of SFAS 123R on earnings management

Seung Won Lee

School of Business Administration (Harrisburg)

Research output: Contribution to journal › Article › peer-review

Abstract

This study investigates whether SFAS 123R was effective at curtailing firms’ earnings management associated with stock option compensation. Using a difference-in-differences (DiD) analysis, I find that firms with high implied option compensation before SFAS 123R significantly reduced earnings management after SFAS 123R. The sub-period analysis indicates that option compensation after SFAS 123R is negatively related to earnings management, while option compensation before SFAS 123R is positively related to earnings management. Overall, the findings indicate that SFAS 123R effectively diminished earnings management associated with stock option compensation.

Original language	English (US)
Journal	Journal of Corporate Accounting and Finance
DOIs	https://doi.org/10.1002/jcaf.22589
State	Accepted/In press - 2022

All Science Journal Classification (ASJC) codes

Accounting
Economics, Econometrics and Finance(all)

Access to Document

10.1002/jcaf.22589

Cite this

@article{7e77bbd8f103468fa6fac28bc4b61867,

title = "The effects of SFAS 123R on earnings management",

abstract = "This study investigates whether SFAS 123R was effective at curtailing firms{\textquoteright} earnings management associated with stock option compensation. Using a difference-in-differences (DiD) analysis, I find that firms with high implied option compensation before SFAS 123R significantly reduced earnings management after SFAS 123R. The sub-period analysis indicates that option compensation after SFAS 123R is negatively related to earnings management, while option compensation before SFAS 123R is positively related to earnings management. Overall, the findings indicate that SFAS 123R effectively diminished earnings management associated with stock option compensation.",

author = "Lee, {Seung Won}",

note = "Publisher Copyright: {\textcopyright} 2022 Wiley Periodicals LLC.",

year = "2022",

doi = "10.1002/jcaf.22589",

language = "English (US)",

journal = "Journal of Corporate Accounting and Finance",

issn = "1044-8136",

publisher = "Wiley-Blackwell",

}

TY - JOUR

T1 - The effects of SFAS 123R on earnings management

AU - Lee, Seung Won

PY - 2022

Y1 - 2022

N2 - This study investigates whether SFAS 123R was effective at curtailing firms’ earnings management associated with stock option compensation. Using a difference-in-differences (DiD) analysis, I find that firms with high implied option compensation before SFAS 123R significantly reduced earnings management after SFAS 123R. The sub-period analysis indicates that option compensation after SFAS 123R is negatively related to earnings management, while option compensation before SFAS 123R is positively related to earnings management. Overall, the findings indicate that SFAS 123R effectively diminished earnings management associated with stock option compensation.

AB - This study investigates whether SFAS 123R was effective at curtailing firms’ earnings management associated with stock option compensation. Using a difference-in-differences (DiD) analysis, I find that firms with high implied option compensation before SFAS 123R significantly reduced earnings management after SFAS 123R. The sub-period analysis indicates that option compensation after SFAS 123R is negatively related to earnings management, while option compensation before SFAS 123R is positively related to earnings management. Overall, the findings indicate that SFAS 123R effectively diminished earnings management associated with stock option compensation.

UR - http://www.scopus.com/inward/record.url?scp=85137514207&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85137514207&partnerID=8YFLogxK

U2 - 10.1002/jcaf.22589

DO - 10.1002/jcaf.22589

M3 - Article

AN - SCOPUS:85137514207

SN - 1044-8136

JO - Journal of Corporate Accounting and Finance

JF - Journal of Corporate Accounting and Finance

ER -

The effects of SFAS 123R on earnings management

Abstract

All Science Journal Classification (ASJC) codes

Access to Document

Other files and links

Fingerprint

Cite this