Irregularities in accounting numbers and earnings management- a novel approach based on SEC XBRL filings /
Henselmann, Klaus.
Irregularities in accounting numbers and earnings management- a novel approach based on SEC XBRL filings / Klaus Henselmann, Dominik Ditter, Elisabeth Scherr - 2015. - Journal of Emerging Technologies in Accounting 12, page 117-151 .
The SEC XBRL mandate enables the gathering of accounting numbers to be fully automatic in a database-like manner that provides vast opportunities for financial analysis. Using this functionality, this study proposes a simple analytical prescreening measure that uses abnormal digit distributions at the firm-year level to identify firms suspected of having managed earnings. On average, we find that the constructed measure indicates a greater amount of irregularities in the reported accounting numbers of firms with higher incentives to engage in earnings management. The suggested XBRL-enhanced digit analysis approach may provide the SEC and investors a simple measure to flag financial reports carrying a higher probability of human interaction.
Accountancy.
Digit analysis.
Benford's law.
Earnings management.
Earnings benchmark.
Irregularities in accounting numbers and earnings management- a novel approach based on SEC XBRL filings / Klaus Henselmann, Dominik Ditter, Elisabeth Scherr - 2015. - Journal of Emerging Technologies in Accounting 12, page 117-151 .
The SEC XBRL mandate enables the gathering of accounting numbers to be fully automatic in a database-like manner that provides vast opportunities for financial analysis. Using this functionality, this study proposes a simple analytical prescreening measure that uses abnormal digit distributions at the firm-year level to identify firms suspected of having managed earnings. On average, we find that the constructed measure indicates a greater amount of irregularities in the reported accounting numbers of firms with higher incentives to engage in earnings management. The suggested XBRL-enhanced digit analysis approach may provide the SEC and investors a simple measure to flag financial reports carrying a higher probability of human interaction.
Accountancy.
Digit analysis.
Benford's law.
Earnings management.
Earnings benchmark.