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Detecting Earnings Management

ISBN: 978-0-471-47086-1
336 pages
November 2003, ©2004
Detecting Earnings Management (0471470864) cover image


This brief and timely text describes the current environment and provides practical details on specific earnings management potential. It shows students how aggressive earnings management can be detected, based on publicly available information. Throughout the text, the authors use multiple perspectives to enhance understanding of the material. Short cases in every chapter provide a "feel" for evaluating public data and analyzing earnings management potential.
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Table of Contents


About the Author.


1. What is Earnings Management?

2. Companies in Trouble—A Historical Perspective.

3. What's in a Financial Report and What to Do with It?

4. The Balance Sheet.

5. The Income Statement, Part I—Level 1 Analysis.

6. The Income Statement, Part II—Expenses, Nonoperating Items.

7. Cash Flows and Alternative Definitions of the Bottom Line.

8. Evaluating Trends, Norms and Quarterly Data.

9. Business Combinations ad Related Issues.

10. Corporate Governance, Compensation, and Other Employee Issues.

11. Risk Management, Derivatives, and Special-Purpose Entities.





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Author Information

Gary Giroux is Shelton Professor of Accounting at Texas A&M University. He received his Ph.D. from Texas Tech University and has been at Texas A&M for about twenty-five years. He teaches financial analysis and other financial and governmental courses in the undergraduate program. He also teaches research methods in the Ph.D. program.
Dr. Giroux has published over fifty articles, including publications in Accounting Review, Journal of Accounting Research, Accounting, Organizations and Society, Journal of Accounting and Public Policy, and numerous other journals. He is the author of three earlier books, including Dollars & Scholars, Scribes & Bribes: The Story of Accounting and Financial Analysis: A User Approach. His primary research areas are governmental and financial accounting. He also is interested in accounting and business history.
He has a number of outside interests, including collecting revenue documents and stamps, reading, golf, and scuba diving. He and his wife Naomi travel regularly, in part based on international research projects and presentations.
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The Wiley Advantage

  • The first section includes a thorough analysis of the current earnings management environment.
  • Earnings management concerns and detection strategies are presented for each topic, from revenue recognition to special purpose entities.
  • Appendix 1 features a complete earnings management detection sheet that summarizes all the issues raised in Chapters 1-10 and provides a complete example of detecting earnings management using a real-world company.
  • The final section reviews particularly difficult earnings management areas such as business combinations and compensation.
  • An historical perspective puts the current financial scandals and regulatory responses in perspective.
  • The importance of corporate governance as a signal of a potential manipulation environment is emphasized.
  • All the problems use Hilton Hotels, a service company, and compare it with competitors Marriott and Mandalay Resorts. These include both quantitative analysis and qualitative issues related to earnings management.
  • End-of-book materials include a glossary and a list of common financial ratios and other quantitative models.
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Instructors Resources
Wiley Instructor Companion Site
Timely updates for regulatory developments, information related to earnings management, business examples (e.g., scandals, indictments and convictions of executives)
PowerPoint Presentations
Test Bank
Solutions Manual
Group Projects
Contact your Wiley Representative
Find Your Rep
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Students Resources
Wiley Student Companion Site
Timely updates for regulatory developments, information related to earnings management, business examples (e.g., scandals, indictments and convictions of executives)
Group Projects
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