“Here’s an interesting note via Lance Roberts at StreetTalk. He notes a recent study from Emory and Duke regarding the tendency for many firms to manipulate their earnings
reports:
“There is also another factor that goes into how companies are beating bottom line estimates – legalized manipulation. Two business professors, Ilia Dichev and Shiva Rajgopal at Emory and Duke, conducted a survey of 169 chief financial officers at publicly-traded companies in the U.S. revealed at least 20 percent of the publicly-traded companies that, as required by law, report earnings results on a quarterly basis are probably fudging the numbers. Furthermore, almost every single CFO surveyed agreed that this is the case.”
