Evidence on Contagion in Earnings Management.

Evidence on Contagion in Earnings Management.
TAR(2015)

Kedia, Simi
Koh, Kevin
Rajgopal, Shivaram

同行业其他Restatements之后，这些公司反而更可能开始Earnings management.（这有理论基础吗？？？）但如果那个restatement比较严重，是SEC强制执行公告的，就木有这个现象。

Contagion传染现象，有以下特性：
(1) 和restatement公司的restate的量，差不多
(2) 时间相关
(3) 如果restate不那么严重

Contagion现场2003-2005暂停，也许因为SOX，但2006-2008又有了。


We examine contagion in earnings management using 2,376 restatements announced during the years 1997-2008. Controlling for industry and firm characteristics, firms are more likely to begin managing earnings after the public announcement of a restatement by another firm in their industry or neighborhood. Such contagion is absent when the restating firm is disciplined by the SEC or class action lawsuits, suggesting deterrent effects of enforcement activity. Contagion among peers is observed (1) in the same account as the one restated by the target firm, or (2) when larger target firms restate or the restatement is prominently disclosed, or (3) when the target firm's restatement is less severe. Contagion stops during the years 2003-2005, possibly due to the enforcement associated with the Sarbanes-Oxley Act (SOX), but reappears during 2006-2008, perhaps because the sting associated with SOX has worn off. In sum, peers' actions appear to affect a firm's earnings management decisions.