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Insider Trading Restrictions and Earnings Management

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dc.contributor.authorScarlat, Elvira
dc.contributor.authorGarcia Osma, Beatriz
dc.contributor.authorShields, Karin
dc.contributor.rorhttps://ror.org/02jjdwm75
dc.date.accessioned2025-06-04T09:18:34Z
dc.date.available2025-06-04T09:18:34Z
dc.date.issued2020-01-22
dc.description.abstractWe study whether firms that voluntarily restrict insider trading have lower incentives for earnings management. Using a large sample of US firms, we measure these restrictions based on the extent to which insider transactions happen shortly after quarterly earnings announcements. We find that the adoption of insider trading restrictions is associated with a reduction of 9.92% in absolute discretionary accruals. Our findings are robust to controlling for changes in corporate governance, and we do not find evidence of a substitution effect between accruals and real earnings management, target beating or timeliness of loss recognition. Taken together, our results indicate that the voluntary adoption of blackout periods that limit insider trading improves the quality of financial reporting.
dc.description.peerreviewedyes
dc.description.statusPublished
dc.formatapplication/pdf
dc.identifier.citationGarcia Osma, B., Scarlat, E., & Shields, K. (2020). Insider trading restrictions and earnings management. Accounting and Business Research, 50(3), 205–237. https://doi.org/10.1080/00014788.2020.1712650
dc.identifier.doihttps://doi.org/10.1080/00014788.2020.1712650
dc.identifier.issn2159-4260
dc.identifier.urihttps://hdl.handle.net/20.500.14417/3804
dc.issue.number3
dc.journal.titleAccounting and Business Research
dc.language.isoen
dc.page.final237
dc.page.initial205
dc.page.total56
dc.publisherTaylor & Francis
dc.relation.departmentAccounting & Management Control
dc.relation.entityIE University
dc.relation.schoolIE Business School
dc.rightsAttribution-NonCommercial 4.0 International
dc.rights.accessRightsinfo:eu-repo/semantics/openAccess
dc.rights.urihttps://creativecommons.org/licenses/by-nc/4.0/deed
dc.subject.keywordCorporate governance
dc.subject.keywordEarnings management
dc.subject.keywordVoluntary insider trading restrictions
dc.titleInsider Trading Restrictions and Earnings Management
dc.typeinfo:eu-repo/semantics/article
dc.version.typeinfo:eu-repo/semantics/publishedVersion
dc.volume.number50
dspace.entity.typePublication
relation.isAuthorOfPublicationfa9d454c-3e45-433f-ae08-4f72b9806c95
relation.isAuthorOfPublication.latestForDiscoveryfa9d454c-3e45-433f-ae08-4f72b9806c95
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