Rounding-up in reported EPS, behavioral thresholds, and earnings management

• Main Authors: Das, Somnath, Zhang, Huai
• Other Authors: Nanyang Business School
• Format: Article
• Language: English
• Published: 2013
• Subjects: DRNTU::Business::Accounting::Valuation
• Online Access: https://hdl.handle.net/10356/100280; http://hdl.handle.net/10220/18186
• Institution: Nanyang Technological University

Reported earnings per share (EPS) are frequently rounded to the nearest cent. This paper provides evidence that firms manipulate earnings so that they can round-up and report one more cent of EPS. Specifically, we examine the digit immediately right of the decimal in the calculated EPS number expres...