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Earnings management in English NHS Hospital Trusts
journal contribution
posted on 2023-06-08, 14:15 authored by Joan Ballantine, John Forker, Margaret GreenwoodIn this paper we review the financial reporting incentives associated with the requirement to breakeven for English NHS Trusts. We also investigate the distribution of reported income and estimate discretionary accruals thereby contributing to the limited literature on earnings management in not-for-profit hospitals. We find that Trust managers use discretion over accruals to report income within the target range around zero. The results are robust to recent challenges to earnings management explanations arising from the use of distributional and aggregate accruals methodologies. Our findings indicate that a precise and challenging financial breakeven target based on current cost residual income is associated with wide-spread use of discretionary accruals to an extent that weakens the accountability of NHS Trusts.
History
Publication status
- Published
Journal
Financial Accountability & ManagementISSN
0267-4424Publisher
Blackwell PublishingExternal DOI
Issue
4Volume
23Page range
421-440Department affiliated with
- Business and Management Publications
Full text available
- No
Peer reviewed?
- Yes
Legacy Posted Date
2013-01-21Usage metrics
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