In this research note, we argue that neuroaccounting could be relied on to examine the relationship between the proximity to debt covenants and earnings management, contingent upon managers’ supervisory style, by capturing brain activities. The adoption of the neuroscience functional neuroimaging approach in this field should contribute to the understanding of managers’ behaviors and provide implications for research and practitioners. The goal of this research note is to provide a new avenue for future research in this field.
We gratefully acknowledge the helpful comments received from Haitham Elsamaloty, Janet Mosebach, Michael Mosebach, Marc Simpson, Xin Wang, and Blerina Zykaj. We also appreciate the very helpful comments from Hong Xie, our neuroscience paid consultant. We would like to acknowledge the financial support received from the Center for Public Policy and Leadership, United Arab Emirates University, UAE (Code #: UAEU31R002-6306-CPPL1-2013) and the technical support provided by the University Hospital, University of Toledo, Toledo, OH, USA.
HassabElnaby, H.R., Abdel-Maksoud, A. and Said, A. (2017), "Debt Covenant Violation and Earnings Management: A Neuroscience Approach and Future Directions – A Research Note", Advances in Accounting Behavioral Research (Advances in Accounting Behavioural Research, Vol. 20), Emerald Publishing Limited, pp. 63-78. https://doi.org/10.1108/S1475-148820170000020003Download as .RIS
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