Upward Earnings Management, Corporate Governance and Expense Stickiness

Document Type : Research Paper

Authors

1 Assistant Professor, Department of Accounting, Islamic Azad University, Chalous Branch

2 Senior Accountant

Abstract

Expense stickiness and cost is an important issue in accounting and economics research, and the literature has shown that expense stickiness cannot be separated from managers’ motivations. In this paper, we examine the effects that Upward Earnings management on expense stickiness, corporate governance’s effect on expense stickiness. also interaction effects of earnings management and corporate governance on expense stickiness.In this paper expense stickiness is considered as dependent variable andcorporate governance and Upward Earnings management is considered as independent variable.The study statistic sample is including 92 accepted firms in stock exchange between 2010-2014.E views econometric software is used to analyze information and that of multi variable linear regression model for assumptions test. The empirical results show that good corporate governance can further reduce cost stickiness, although its effect is not as strong as that of earnings management. also interaction effect between corporate governance and Upward Earnings management can reduce the expense stickiness.

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References

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Journal of Accounting and Social Interests
Volume 7, Issue 3 - Serial Number 26
December 2017
Pages 61-80

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History

  • Receive Date: 02 July 2016
  • Revise Date: 16 August 2017
  • Accept Date: 04 September 2017

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