기업의 성장성이 실제이익조정에 미치는 영향 - 시가-장부가 비율(market-to-book ratio) 중심으로 -

This paper provides empirical support for the effects of firms' growth measured by the market-to-book ratio(MB) on real earnings management. It affects resource distribution and cash flows through real operating activities to report higher income. The market to book ratio has the negative relation with real earnings management. It suggests that the growth firms with higher market-to-book ratios may have lower incentives to increase earnings through manipulating real business activities with costly efforts since higher market values reflect attractive growth opportunities and higher future profitability performance. The profitable growth firms have the incentives to reduce earnings to avoid higher political costs and corporate tax. The negative relation between growth firms audited by Big4 auditors and real earnings management reals that Big4 auditors do not allow the income-increasing real earnings management. On the other hand, the growth firms with higher leverage ratio might increase their earnings to avoid debt covenant violation by reducing abnormal discretionary expenses. The growth firms with higher sales growth have abnormally lower cash flows and temporarily raise sales revenues through increasing price discounts and being lenient with credit terms. In addition to a growing body of research on real earnings management, this paper's findings contribute to provide insights into how a firm's growth involves real earnings management through financial reporting. It is noteworthy that the consequences of three types of real earnings management have a meaningful implication for the empirical methods using the market-to-book ratio.