Download now Free registration required
The authors test whether accounting can be used as political currency. The setting is the US congressional election of 2004, where outsourcing of US jobs was a campaign issue. They find that the largest corporate donors to principal candidates in closely watched congressional races manage earnings downwards in the two quarters immediately preceding the 2004 election. They find no evidence of such downwards earnings management among corporate donors to candidates in all other congressional races. Election outcomes for candidates are also systematically associated with the extent of donors' downwards earnings management in closely watched races, but not all other races.
- Format: PDF
- Size: 258.6 KB