THE IMPACT OF THE IMPLEMENTATION OF THE NEW REVENUE STANDARD ON EARNINGS MANAGEMENT IN HIGH-TECH ENTERPRISES
Keywords:
New revenue standard, High-tech enterprises, Earnings management, R&D intensityAbstract
This study investigates how the adoption of the revised revenue recognition standard affects earnings management practices among Chinese A-share listed high-tech firms. Empirical findings reveal a notable decline in accrual-based earnings management following the standard's enactment, indicating that its enhanced requirements—spanning contract identification, performance obligation disaggregation, control transfer assessment, and expanded disclosure—effectively curtail firms' discretion in revenue recognition. However, further examination uncovers a concurrent rise in real earnings management, suggesting that when accrual-based manipulation becomes constrained, firms tend to substitute it with real operating decisions to achieve desired earnings outcomes. Moreover, this regulatory effect is amplified among firms characterized by greater R&D intensity. The study enriches the accounting literature on the economic ramifications of standard-setting and earnings management within the high-tech sector, while offering practical insights for regulators, auditors, and investors seeking to better assess the financial reporting quality of technology-oriented enterprises.References
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