The Effect of ERP System Implementations on the Management of Earnings and Earnings Release Dates

ERP systems have become the system of choice for the majority of publicly traded companies and have radically changed the way accounting information is processed, prepared, audited, and disseminated. In this paper, the authors examine whether ERP system implementations have affected the extent to which firms manage earnings amounts and release dates. They find, for a sample of ERP adopters, that implementations led to increases in the absolute value of discretionary accruals (i.e., greater earnings management). They also find a positive relationship between the extent of ERP module adoption and the extent of earnings management.

Provided by: California Polytechnic State University Topic: Social Enterprise Date Added: Oct 2008 Format: PDF

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