eCite Digital Repository

Political cost influences on income smoothing via extraordinary item classification


Godfrey, JM and Jones, KL, Political cost influences on income smoothing via extraordinary item classification, Accounting and Finance, 39, (3) pp. 229-253. ISSN 0810-5391 (1999) [Refereed Article]

DOI: doi:10.1111/1467-629X.00025


Until 1990, Australian managers could classify recurring gains and losses outside the normal operations of the firm as either operating or extraordinary items. The results of this study indicate that managers of companies with highly unionised workforces, and therefore subject to labour-related political costs, attempted to affect the probability of wealth transfers by smoothing reported net operating profit via the classification of those recurring gains and losses. The degree of management ownership is associated with classificatory smoothing but interest coverage is not, indicating differential contracting influences. © AAANZ, 1999.

Item Details

Item Type:Refereed Article
Research Division:Commerce, Management, Tourism and Services
Research Group:Accounting, auditing and accountability
Research Field:Financial accounting
Objective Division:Economic Framework
Objective Group:Other economic framework
Objective Field:Other economic framework not elsewhere classified
UTAS Author:Godfrey, JM (Professor Jayne Godfrey)
ID Code:16239
Year Published:1999
Deposited By:Accounting and Accountability
Deposited On:1999-08-01
Last Modified:2011-09-15

Repository Staff Only: item control page