... to manage earnings upward. To the best of authors’ knowledge, there is only one study by Chi et al. (2011) that examines the impact of audit quality on accruals and real earnings management in a setting involving the US firms with incentives to meet earnings benchmarks. Using a sample of 925...

... in earnings distributions Earnings benchmark Prospect theory M41 G18 G41 Regulations containing bright-line tests can induce managerial attempts to avoid the bright-line thresholds to reduce compliance cost (Jiang and Wang, 2008 ; Gao et al., 2009). Presumably, the avoidance...