Date of Conferral
Dr. Steven Tippins
Insider trading and earnings management (EM) have traditionally been associated with fraud and corporate scandals. Corporations involved in fraudulent financial reporting or earnings manipulations were assumed to have used insider trading patterns to manipulate earnings, thereby concealing information from investors. The purpose of this quantitative, non-experimental study was to examine the association between insider trading patterns and EM citations among a randomly selected sample of publicly traded companies. The research question pertained to the association between the number of EM citations and whether a firm exhibited patterns of insider trading among publicly traded firms. The theoretical framework was based on accounting, auditing and financial theories. Archival data were collected in the form of financial statements from annual reports of 77 companies submitted to the Securities and Exchange Commission. A multiple linear regression was used to answer the research question to determine whether there was an association between insider trading patterns and EM. Results of descriptive statistics and regression analysis revealed that, after controlling for the firm size, a significant association existed between the number of EM citations and patterns of insider trading in the sample of publicly traded firms. A positive relationship, wherein firms with patterns of insider trading had more EM citations as indicated from the regression results. These findings may encourage investors, regulators, auditors, the public, and other interested parties to work with researchers to foster confidence in financial markets and the accounting profession, and to redeem the mistakes made by companies in the past.
Nash-Haruna, Anne-Mary Emuobonuvie, "Association of Insider Trading Patterns with Earnings Management Citations from 2002-2012" (2018). Walden Dissertations and Doctoral Studies. 6074.