Title: Does earnings acceleration affect earnings management in different firm life cycle stages? Evidence from Indonesia

Authors: Indarti Diah Palupi; Ainun Na'im

Addresses: Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada, Yogyakarta, Indonesia; Department of Accounting, Faculty of Economics and Business, Universitas Muhammadiyah Surakarta, Surakarta, Indonesia ' Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada, Yogyakarta, Indonesia

Abstract: This study investigates the relationship between earnings acceleration (EA) and earnings management (EM) at the firm life cycle stages. It is designed to analyse how variations in EA can influence different EM strategies. We use data from 629 non-financial firms listed on the Indonesia Stock Exchange from 2008 to 2022. The results show significant differences in EA and EM across the firm life cycle stages. Earnings acceleration affects accrual and real earnings management and expense shifting except revenue shifting. These findings imply that EM in the previous period can be the performance benchmark that drives EM for the current period. This study is the first to test the relationship between EA and EM within the firm life cycle stages. The EA variable is still limited in empirical research. However, it is well-considered in investment decisions.

Keywords: accrual-based earnings management; classification shifting; earnings acceleration; EA; real earnings management; REM; firm life cycle; Indonesia.

DOI: 10.1504/IJRM.2024.143450

International Journal of Revenue Management, 2024 Vol.14 No.4, pp.397 - 431

Received: 13 Jun 2024
Accepted: 14 Sep 2024
Published online: 20 Dec 2024 *

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