Lancaster EPrints

Earnings management in response to a windfall-tax in the water and sewerage utility companies in England and Wales

Beekes, W A (2003) Earnings management in response to a windfall-tax in the water and sewerage utility companies in England and Wales. Working Paper. The Department of Accounting and Finance, Lancaster University.

Full text not available from this repository.

Abstract

This study examines whether the ten Water and Sewerage group Companies (WaSCs) in England and Wales used accounting accruals to decrease earnings and in turn reduce political costs in response to the Windfall Tax. In particular, this study encompasses a sample period when there was widespread speculation about a potential Windfall Tax and the monopolistic level of utility company profits. Therefore considerable incentives existed for managers to use the accounting discretion available to them to reduce potential political costs. The results show that WaSCs did not use income-decreasing earnings management in response to the Windfall Tax in the year prior to the 1992 or the 1997 General Election. In contrast the evidence obtained in this study suggests that income-increasing accruals were adopted. The results suggest other pressures were more important to these large group plcs than the threat of politically imposed wealth transfers.

Item Type: Monograph (Working Paper)
Uncontrolled Keywords: Accounting Accruals ; Earnings Management ; Water and Sewerage Companies ; Windfall Tax.
Subjects: UNSPECIFIED
Departments: Lancaster University Management School > Accounting & Finance
ID Code: 48634
Deposited By: ep_importer_pure
Deposited On: 11 Jul 2011 22:03
Refereed?: No
Published?: Published
Last Modified: 27 Jul 2012 01:11
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/48634

Actions (login required)

View Item