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We investigated the vehicles that Korean firms use when the firms manage earnings. We partitioned our sample into low, mid and high accrual sub-samples based on discretionary accruals. Low accrual firms are defined as income-decreasing firms whereas the high accrual firms are considered income increasing firms in this study. We decomposed accounting earnings into cash from operations and various components of accruals in a systematic way. Next we examined the types of accruals individual firms use when the respective firms increase reported earnings. The empirical results of the study indicate that there are clear discrepancies in the earnings management vehicles firm use when the firms manage earnings depending on the directions of earnings management. More specifically, income-increasing firms frequently employ non-cash revenues including asset-disposal gains. Income-decreasing firms employ non-cash expenses including bad-debt expenses and asset-disposal losses. Firms also tend to use current accruals but to a limited extent as current accruals entail cash flow implications in the following years. [ABSTRACT FROM AUTHOR]

Using a sample of earnings announcements of Chinese firms in the fiscal years 1994-1999, covering the periods before and after the introduction of a regulation to stagger the release of annual reports, we reassess the relation between earnings news and the timing of earnings announcements. We find that even though the reporting lag has significantly shortened as a result of the regulation, the pattern whereby good news is announced earlier than bad news persists. We then examine the behavior of stock prices before earnings announcements and find some indication of information leakage. These findings suggest that the regulation had the expected effect of reducing reporting delay and earnings release clustering. Yet, it did not appear to reduce the extent of the pre-announcement leakage of information. [ABSTRACT FROM AUTHOR]