The purpose of this study is to investigate whether earnings boosts before the year end trigger earnings management. It examines whether firms that substantially outperformed their last year earnings during the first three quarters push their earnings down to avoid reporting earnings boosts.,Regression analysis is used to compare earnings management of firms with earnings boosts and other firms.,The results indicate that firms outperforming their last year results by the end of the third quarter manipulate their earnings downwards by means of real activities manipulation, while they do not indicate income-decreasing accruals management. It is also found that consistent with the prominent shift from accruals management to real activities manipulation, accruals management is less costly which justifies why it is used for downward manipulation.,The results are limited to one single earnings benchmark i.e. last year earnings. Further research may individually or collectively examine other benchmarks including analysts' forecasts.,The findings suggest that users should be more vigilant of firms exceeding their last year interim results, as they could be involved in downward earnings management.,This study documents earnings management in a new setting where earnings boosts before the year end trigger downward manipulation of real activities.

中文翻译：

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盈余管理以避免收益增长

这项研究的目的是调查年底前收入增长是否触发了收入管理。它检查了前三个季度业绩明显好于去年同期的公司是否将其收益压低，以避免报告收益增长。回归分析用于比较具有收益增长的公司和其他公司的收益管理。结果表明，公司到第三季度末，它们的业绩好于去年的业绩，但通过实际活动操纵来操纵其收入下降，而它们并不表示应减少收入的应计管理。还发现，与从应计管理向实际活动操纵的显着转变一致，应计管理的成本较低，这证明了为什么将其用于向下操纵。结果仅限于一个单一的收益基准，即去年收益。进一步的研究可能会单独或集体检查其他基准，包括分析师的预测。研究结果表明，用户应警惕超过上年中期业绩的公司，因为他们可能参与向下的收益管理。一种新的设置，在这种新设置下，年底前收入的增长会触发实际活动的向下操纵。