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این مقاله علمی پژوهشی (ISI) به زبان انگلیسی از نشریه الزویر مربوط به سال ۲۰۲۱ دارای ۹ صفحه انگلیسی با فرمت PDF می باشد در ادامه این صفحه لینک دانلود رایگان مقاله انگلیسی و بخشی از ترجمه فارسی مقاله موجود می باشد.
کد محصول: H743
سال نشر: ۲۰۲۱
نام ناشر (پایگاه داده): الزویر
نام مجله: Advances in Accounting
نوع مقاله: علمی پژوهشی (Research articles)
تعداد صفحه انگلیسی: ۹ صفحه PDF
عنوان کامل فارسی:
مقاله انگلیسی ۲۰۲۱: حسابداری هزینه های موجودی و رفتار مدیریت درآمد واقعی
عنوان کامل انگلیسی:
Accounting for inventory costs and real earnings management behavior
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Abstract
Prior research finds that managers engage in inventory overproduction to inflate current earnings despite the fact that overproduction is associated with significant economic costs. Additionally, Statement of Financial Accounting Standards No. 151 (SFAS 151) limited the fixed costs that can be capitalized to inventory in periods of low production, thereby introducing a penalty for underproduction by requiring firms to expense unallocated overhead in the current period. Because periods of underproduction often follow periods of overproduction, and because SFAS 151’s emphasis on the subjective determination of normal capacity can erroneously categorize overproducing firms as underproducers in subsequent years, we posit that SFAS 151 makes overproduction less desirable than before. Therefore, we posit that management’s propensity to use overproduction to meet earnings benchmarks should decrease after the adoption of SFAS 151. Consistent with expectations, we find a lower propensity to use overproduction to meet benchmarks following SFAS 151. These results challenge the view that SFAS 151 inadvertently encouraged overproduction.
Keywords: Real earnings management, Inventory overproduction, SFAS 151, Accounting Standards
۱.Introduction
Prior research suggests that managers make choices about real business activities in order to influence reported earnings.1 The accounting literature refers to this practice as “real earnings management.” In this paper, we focus on a specific type of real earnings management – the overproduction of inventory – and we investigate whether managers’ (over)production decisions changed after the adoption of Statement of Financial Accounting Standards No. 151 (SFAS 151)..
Inventory overproduction can yield accounting benefits because when fixed overhead costs are allocated to units produced, overproduction allows a greater proportion of fixed overhead costs to remain on the balance sheet, attached to unsold units of inventory. This decreases reported cost of goods sold (COGS) and increases reported net income (Jiambalvo, Noreen, & Shevlin, 1997). There are costs, however, to real earnings management. For example, prior studies suggest that real earnings management reduces long-term firm value (e.g., Ewert & Wagenhofer, 2005; Garcia Lara, Garcia Osma, & Neophytou, 2009; Cohen and Zarowin 2010; Kim & Park, 2014; Francis, Hasan, & Li, 2016; Bereskin, Hsu, & Rotenberg, 2018). Moreover, in their study of the inventory practices of the Big Three automakers, General Motors, Ford, and Chrysler, Brüggen, Krishnan, and Sedatole (2011) find that overproduction imposes tangible costs. Specifically, they report that managers were “… aware that excess production was hurting long-term revenues and costs” because of its impact on product residual values and customer expectations (Brüggen et al., 2011, 94)…
۵.Conclusion
This study investigates whether the real earnings management behavior of manufacturing firms changed following the adoption of SFAS 151. SFAS 151 changed the accounting for how fixed overhead costs can be allocated between the income statement and ending inventory, increasing the economic cost of underproduction. Because periods of underproduction often follow periods of overproduction, and because SFAS 151’s emphasis on the subjective determination of normal capacity can erroneously categorize overproducing firms as under producers in subsequent years, we posit thatSFAS151makesoverproductionless desirable…