{"id":{"repo_id":"vt","oai_identifier":"oai:vtechworks.lib.vt.edu:10919/26054"},"canonical_url":"https://search.dev.ndltd.org/etd/vt/oai:vtechworks.lib.vt.edu:10919/26054","repository":{"repo_id":"vt","name":"Virginia Tech","base_url":"https://vtechworks.lib.vt.edu/oai/request"},"display":{"title":"Accounting Choice in Troubled Companies: An Examination of Earnings Management by NASDAQ Firms in Jeopardy of Delisting","abstract":"The purpose of this research is to examine whether managers of troubled firms engage in income-increasing earnings management for capital market purposes to maintain a listing on the NASDAQ National Market. Troubled firms are defined as those firms whose share price has fallen below the specified dollar-per-share minimum mandated by the market. The two hypotheses attempt to answer two separate, but interrelated questions: First, do managers of troubled firms engage in earnings management more in periods of distress than in periods of non-distress? And second, do managers of troubled firms engage in earnings management more than similar firms not in jeopardy of delisting? Both a time-series and cross-sectional approach is used to answer these questions. The initial grouping consisted of all NASDAQ National Market firms with a share price of $1 or below at some point during the period from March 1997 through September 2002. The final sample consisted of 215 firms for the time-series analysis and 495 firms for the cross-sectional analysis. Two accrual expectation models were used, including the Jones (1991) and the modified Jones Model (Dechow, Sloan, and Sweeney, 1995). The results were unable to confirm that managers engage in this behavior, and similar to the results of DeAngelo, DeAngelo, and Skinner (1994), the findings suggest that managers' accounting choices primarily reflect their firms' financial difficulties, rather than attempts to inflate income through discretionary accruals. After controlling for reverse stock splits, dividend reductions, going-concern issues/bankruptcy, and changes in management, the models found significantly negative abnormal accruals. The dissertation concludes with a discussion of possible interpretations for the findings.","abstract_html":"The purpose of this research is to examine whether managers of troubled firms engage in income-increasing earnings management for capital market purposes to maintain a listing on the NASDAQ National Market. Troubled firms are defined as those firms whose share price has fallen below the specified dollar-per-share minimum mandated by the market. The two hypotheses attempt to answer two separate, but interrelated questions: First, do managers of troubled firms engage in earnings management more in periods of distress than in periods of non-distress? And second, do managers of troubled firms engage in earnings management more than similar firms not in jeopardy of delisting? Both a time-series and cross-sectional approach is used to answer these questions. The initial grouping consisted of all NASDAQ National Market firms with a share price of $1 or below at some point during the period from March 1997 through September 2002. The final sample consisted of 215 firms for the time-series analysis and 495 firms for the cross-sectional analysis. Two accrual expectation models were used, including the Jones (1991) and the modified Jones Model (Dechow, Sloan, and Sweeney, 1995). The results were unable to confirm that managers engage in this behavior, and similar to the results of DeAngelo, DeAngelo, and Skinner (1994), the findings suggest that managers' accounting choices primarily reflect their firms' financial difficulties, rather than attempts to inflate income through discretionary accruals. After controlling for reverse stock splits, dividend reductions, going-concern issues/bankruptcy, and changes in management, the models found significantly negative abnormal accruals. The dissertation concludes with a discussion of possible interpretations for the findings.","abstract_has_math":false,"creators":["Belski, William Houston"],"institution":"Virginia Tech","degree_name":"Ph. D.","degree_level":"doctoral","degree_discipline":"Accounting and Information Systems","degree_department":"Accounting and Information Systems","school":null,"contributors":[],"advisors":[],"committee_chairs":["Brozovsky, John A."],"committee_members":["Kumar, Raman","Easterwood, John C.","Richardson, Frederick M.","Maher, John J."],"year":2004,"date_issued":"2004-05-28","date_published":"2004-05-28","updated_at":"2026-07-22T22:19:31Z","subjects":["Delisting","NASDAQ","Earnings Management","Abnormal Accruals","Accounting Choice"],"languages":[],"rights":["In Copyright"],"rights_urls":["http://rightsstatements.org/vocab/InC/1.0/"],"identifier_entries":[{"key":"dc:identifier.other","label":"Dc Identifier Other","values":["etd-01282005-123514"],"render_values":[{"text":"etd-01282005-123514","href":null,"code":true}]}]},"links":{"outbound_url":"http://hdl.handle.net/10919/26054","outbound_label":"Handle","outbound_source":"dc:identifier.uri"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor.committeechair","label":"Committee Chair","values":["Brozovsky, John A."]},{"key":"dc:contributor.committeemember","label":"Committee Member","values":["Kumar, Raman","Easterwood, John C.","Richardson, Frederick M.","Maher, John J."]},{"key":"dc:contributor.department","label":"Department","values":["Accounting and Information Systems"]},{"key":"dc:creator","label":"Author","values":["Belski, William Houston"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date.accessioned","label":"Dc Date Accessioned","values":["2014-03-14T20:06:57Z"]},{"key":"dc:date.available","label":"Dc Date Available","values":["2014-03-14T20:06:57Z","2008-02-03"]},{"key":"dc:date.issued","label":"Date","values":["2004-05-28"]},{"key":"dc:publisher","label":"Institution","values":["Virginia Tech"]},{"key":"dc:type","label":"Dc Type","values":["Dissertation"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Accounting and Information Systems"]},{"key":"thesis:degree_level","label":"Degree Level","values":["doctoral"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph. 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Troubled firms are defined as those firms whose share price has fallen below the specified dollar-per-share minimum mandated by the market. The two hypotheses attempt to answer two separate, but interrelated questions: First, do managers of troubled firms engage in earnings management more in periods of distress than in periods of non-distress? And second, do managers of troubled firms engage in earnings management more than similar firms not in jeopardy of delisting? Both a time-series and cross-sectional approach is used to answer these questions. The initial grouping consisted of all NASDAQ National Market firms with a share price of $1 or below at some point during the period from March 1997 through September 2002. The final sample consisted of 215 firms for the time-series analysis and 495 firms for the cross-sectional analysis. Two accrual expectation models were used, including the Jones (1991) and the modified Jones Model (Dechow, Sloan, and Sweeney, 1995). The results were unable to confirm that managers engage in this behavior, and similar to the results of DeAngelo, DeAngelo, and Skinner (1994), the findings suggest that managers' accounting choices primarily reflect their firms' financial difficulties, rather than attempts to inflate income through discretionary accruals. After controlling for reverse stock splits, dividend reductions, going-concern issues/bankruptcy, and changes in management, the models found significantly negative abnormal accruals. The dissertation concludes with a discussion of possible interpretations for the findings."]},{"key":"dc:description.degree","label":"Dc Description Degree","values":["Ph. D."]},{"key":"dc:title","label":"Title","values":["Accounting Choice in Troubled Companies: An Examination of Earnings Management by NASDAQ Firms in Jeopardy of Delisting"]}]}],"canonical_facts":{"dc:contributor.committeechair":["Brozovsky, John A."],"dc:contributor.committeemember":["Kumar, Raman","Easterwood, John C.","Richardson, Frederick M.","Maher, John J."],"dc:contributor.department":["Accounting and Information Systems"],"dc:creator":["Belski, William Houston"],"dc:date.accessioned":["2014-03-14T20:06:57Z"],"dc:date.available":["2014-03-14T20:06:57Z","2008-02-03"],"dc:date.issued":["2004-05-28"],"dc:description.abstract":["The purpose of this research is to examine whether managers of troubled firms engage in income-increasing earnings management for capital market purposes to maintain a listing on the NASDAQ National Market. Troubled firms are defined as those firms whose share price has fallen below the specified dollar-per-share minimum mandated by the market. The two hypotheses attempt to answer two separate, but interrelated questions: First, do managers of troubled firms engage in earnings management more in periods of distress than in periods of non-distress? And second, do managers of troubled firms engage in earnings management more than similar firms not in jeopardy of delisting? Both a time-series and cross-sectional approach is used to answer these questions. The initial grouping consisted of all NASDAQ National Market firms with a share price of $1 or below at some point during the period from March 1997 through September 2002. The final sample consisted of 215 firms for the time-series analysis and 495 firms for the cross-sectional analysis. Two accrual expectation models were used, including the Jones (1991) and the modified Jones Model (Dechow, Sloan, and Sweeney, 1995). The results were unable to confirm that managers engage in this behavior, and similar to the results of DeAngelo, DeAngelo, and Skinner (1994), the findings suggest that managers' accounting choices primarily reflect their firms' financial difficulties, rather than attempts to inflate income through discretionary accruals. After controlling for reverse stock splits, dividend reductions, going-concern issues/bankruptcy, and changes in management, the models found significantly negative abnormal accruals. The dissertation concludes with a discussion of possible interpretations for the findings."],"dc:description.degree":["Ph. D."],"dc:identifier.other":["etd-01282005-123514"],"dc:identifier.uri":["http://hdl.handle.net/10919/26054"],"dc:publisher":["Virginia Tech"],"dc:rights":["In Copyright"],"dc:rights.uri":["http://rightsstatements.org/vocab/InC/1.0/"],"dc:subject":["Delisting","NASDAQ","Earnings Management","Abnormal Accruals","Accounting Choice"],"dc:title":["Accounting Choice in Troubled Companies: An Examination of Earnings Management by NASDAQ Firms in Jeopardy of Delisting"],"dc:type":["Dissertation"],"thesis:degree_discipline":["Accounting and Information Systems"],"thesis:degree_level":["doctoral"],"thesis:degree_name":["Ph. D."],"thesis:institution_name":["Virginia Polytechnic Institute and State University"]},"updated_at":"2026-07-22T22:19:31Z"}