Document Type
Article
Language
eng
Publication Date
3-2010
Publisher
The Clute Institute
Source Publication
International Business & Economics Research Journal
Source ISSN
1535-0754
Abstract
This paper investigates the influence of foreign operations and their financial disclosure on earnings quality in terms of accounting conservatism (timely recognizing losses). In a large (7,311 corporate years) sample of U.S. corporations, we find earnings of firms with multinational operations (MNCs) tend to be of lower quality and are reported less conservatively than those without foreign operations (domestic firms). Further, by looking at the geographic segment information disclosed by MNCs, we find that earnings conservatism gets improved if a MNC reports “clean” segment information of foreign operations; wherein operating results of MNC are broken down by geographic regions (continent or country) and reported separately. This study has implications for monitoring foreign operations and regulations that may improve earnings quality in the global economy.
Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.
Recommended Citation
Yang, Sixian; Hu, Fang; and Giacomino, Don, "The Influence of Foreign Operations and Their Disclosure on Earnings Quality" (2010). Accounting Faculty Research and Publications. 68.
https://epublications.marquette.edu/account_fac/68
Comments
Published version. International Business & Economics Research Journal, Vol. 9, No. 3 (March 2010): 109-119. DOI. © 2010 Clute Institute. Used with permission.