An investigation of the motivation of hotel owners and operators to engage in earnings management

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Title An investigation of the motivation of hotel owners and operators to engage in earnings management
Author Turner, Michael J.; Guilding, Christopher John
Journal Name Qualitative Research in Accounting & Management
Editor Deryl Northcott
Year Published 2011
Place of publication United Kingdom
Publisher Emerald Group Publishing
Abstract Purpose – The purpose of this paper is to empirically investigate the differential motivations of hotel owners and operators to engage in earnings management through the selective capitalisation or expensing of asset related expenditures. Design/methodology/approach – Research evidence has been collected via a mixed methods approach utilising 20 semi-structured interviews with key hotel management contract stakeholders in Australia and a questionnaire survey administered to hotel general managers in Australia and New Zealand. Findings – A review of the literature has resulted in an original distillation of 18 distinct earnings management motivations for hotel owners and operators. Qualitative data collected suggest an additional four motivations and that the primary motivation for hotel owners and operators to engage in earnings management stems from the two parties’ desire to affect the size of the incentive management fee that is paid to hotel operators. A suggestion that operators have a greater tendency to seek to capitalise asset related expenditures, relative to owners, has been supported by both qualitative and quantitative data collected. Originality/value – This study appears to be the first to have examined the manner in which an idiosyncratic aspect of hotel governance can result in competing earnings management motivations between hotel owners and operators; the first to pursue a broad level of abstraction with respect to examining earnings management in the context of asset related expenditure capitalisation decision making; the first to assess the relative strength of earnings management motivations concerning the capitalisation or expensing of asset related expenditure; and the first to conduct earnings management research utilising a mixed methods research approach involving the conducting of face-to-face interviews as well as administration of a questionnaire survey.
Peer Reviewed Yes
Published Yes
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Copyright Statement Copyright 2011 Emerald. This is the author-manuscript version of this paper. Reproduced in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.
Volume 8
Issue Number 4
Page from 358
Page to 381
ISSN 1176-6093
Date Accessioned 2012-04-20
Language en_US
Research Centre Griffith Institute For Tourism
Faculty Griffith Business School
Subject Accounting, Auditing and Accountability
Publication Type Journal Articles (Refereed Article)
Publication Type Code c1

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