Defense Date


Document Type


Degree Name

Doctor of Philosophy



First Advisor

Dr. Ruth W. Epps

Second Advisor

Dr. Carolyn S. Norman


In November 2002, the Securities and Exchange Commission released a final ruling regarding a filing requirement change. The proposed requiredment change was for domestic companies to file annual and quarterly reports within 60 and 30 days, respectfully. This requirement was recommended for companies with a market value of at least $75 million and would reduce by 30 days the time allowed to file these reports. The Wall Street Journal article announcing this proposal stated the change was an effort to address some of the problems arising from accounting scandals such as the Enron scandal of 2001. A potential added benefit of the SEC rule change might be a reduction in earnings management. The purpose of this study is two fold. The first part is to test the theory that earnings management takes time. The second purpose is to examine the question of market recognition of earnings management. Sloan (1996) and other researchers report that the market does not recognize earnings management in the long term. Xie's (2001) results suggest that the market over prices earnings management. Balsam et al. (2002) found the market reacted negatively to abnormal accruals. The current research study uses a larger sample including firms not suspected of earnings management and fails to confirm the Balsam et al. result. The findings of the current study suggest that the results of the Balsam et al. study are either the result of the data selection process used in that study or the data selection processs used by Balsam et al. controlled for other market fluctuations not included in the current study. The results of this study suggest a positive relationship between earnings management and the time to file annual reports. Thsi finding supports the theory that moving earnings management from a future period to the current period requires time. Thus, the SEC rule change to reduce the time to file annual reports should reduce a company's ability to manipulate earnings.


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Is Part Of

VCU University Archives

Is Part Of

VCU Theses and Dissertations

Date of Submission

June 2008

Included in

Accounting Commons