Date of Submission
Campus Only Senior Thesis
Bachelor of Arts
© 2022 Miguel Garcia
Managers perform employ different forms of accounting techniques to manipulate earnings. There are many different reasons as to why they manipulate their earnings but one of them is to avoid covenant violations. We combine a novel data set which contains information about the count of covenants found in credit agreements and see if it can predict earnings management. We find that the count of covenants explains a small variation in the performance adjusted accruals. This can potentially be explained by there being a wide variety of other factors that would lead to earnings management.
Garcia, Miguel, "Contract Strictness effect on Discretionary Accruals" (2022). CMC Senior Theses. 2921.
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.