An investigation of earnings management through marketing actions
By: Craig J. Chapman, Thomas J. Steenburgh .
Contributors: Steenburgh, Thomas; Harvard Business School
Series: Working paper / Harvard Business School -- 08-073; Working paper (Harvard Business School) -- 08-073
Publisher: Harvard Business School
Published: 2008
Place of publication: Boston]
Language: eng
Number of pages: 49
Description: Combining new, hand-collected data with a widely studied dataset, we examine how firms use marketing actions to manage reported earnings. In contrast to prior literature that suggests firms reduce marketing expenditures in order to boost reported earnings, we find that soup manufacturers roughly double the frequency of all marketing promotions (price discounts, feature advertisements, and aisle displays) at the fiscal year-end and that they engage in similar behavior following periods of poor financial performance. In addition to offering promotions more frequently, we find that firms offer deeper price discounts to manage earnings during these periods.
Notes: "February 2008"--Publisher's web site.

Includes bibliographical references.