Earnings Management: An Analysis on Textile Sector of Bangladesh

Abstract

This paper evaluates the earnings management in the textile sector of Bangladesh. The modified Jones Model has been used in detecting earnings management, which incorporates the change in revenue in measuring discretionary accruals, for the period of 1992 to 2002. In this period discretionary accruals are found to be significant for five out of fourteen firms. Nevertheless it is not robustly conclusive from the test that earnings have been managed within the observation period.