Med Rätt att Manipulera?

Purpose This study aims to investigate earnings management based on company size and incentive programs within all large-, mid- and small cap companies in the US technology industry. Theoretical perspectives The results of the study are analyzed on the basis of agent theory and a developed model of agent theory in the form of managerial power approach. Methodology The study uses a quantitative method in the form of multiple linear regression (MLR) analysis to examine how incentive programs affect earnings management in conjunction with the use of ordinary least Squares (OLS). A t-test is used to examine the prevalence of earnings management in large-, mid- and small-cap companies. Earnings management will be studied through accruals. The study uses the modified Jones model developed by Dechow, Sloan and Sweeney in 1995 as a method to approximate earnings management. Empirical foundation The results of the study suggest that the prevalence of earnings management varies between large- and small-cap companies within the technology sector. Only in mid cap companies is there evidence of a significant relationship between incentive programs and earnings management. Conclusions The study's main contribution is that it draws attention to how earnings management behaves in an industry depending on company size and incentive programs. Prerequisites for practicing earnings management vary according to industry conditions and research on earnings management linked to specific industries can therefore be used to combat opportunistic earnings management.