The association of real earnings management with: Enterprise resource planning systems, audit effort, and future financial performanc

Emerging research on real earnings management [REM] has expressed the concern that firms deviating from normal business practices may endure a negative impact on future cash flows and performance. This dissertation (in three essays) investigates the phenomenon of real earnings management in its association with: 1) enterprise resource planning systems [ERPs]; 2) audit report lags [ARLs]; and 3) future firm performance. In the first investigation I hypothesize that the increased monitoring associated with the implementation of an ERP will result in a decline in REM. In the second investigation I hypothesize that higher levels of REM will evoke greater auditor scrutiny and be associated with longer ARLs. In the third investigation I hypothesize that managerial actions that would ordinarily be classified as REM: reductions in discretionary expenditures or overproduction, are not REM but indicative of enhanced efficiencies when found in concert with prior period restructurings or expected future sales growth respectively. In each of the three investigations, my hypotheses are confirmed.