TY  - JOUR
AB  - In 2001 Enron filed amended financial statements setting off a chain of events starting with its bankruptcy filing and including the conviction of Arthur Andersen for obstruction of justice. The end of 2001 and the first half of 2002 included a heightened level of publicity for the accounting practices of listed companies. This paper addresses whether there was a detectable change in the incidence of earnings management around this time period. Earnings reports released in 2001 and 2002 were analyzed. The results showed that revenue numbers were subject to upwards management. Benford's Law was used to detect such manipulations. Earnings Per Share (EPS) numbers showed a marked discontinuity in the distribution around zero which is consistent with upwards management. The results also showed a tendency towards neat round EPS numbers such as 0.10, 0.20, etc. The overall results are consistent with a small but noticeable increase in earnings management in 2002. Enron's reported numbers are reviewed and these show a strong tendency towards making financial thresholds.
VL  - 4
IS  - 1
SN  - 1475-7702
DO  - 10.1108/eb043420
UR  - https://doi.org/10.1108/eb043420
AU  - Nigrini Mark J.
PY  - 2005
Y1  - 2005/01/01
TI  - An Assessment of the Change in the Incidence of Earnings Management Around the Enron‐Andersen Episode
T2  - Review of Accounting and Finance
PB  - Emerald Group Publishing Limited
SP  - 92
EP  - 110
Y2  - 2024/09/21
ER  -