Microsoft Word 2007 ichrie conference Proceedings Final-Final 06-06-07. doc

 
2007 Annual International CHRIE Conference & Exposition 
474
IMPACT OF EARNINGS MANIPULATION ON VALUATION OF PUBLICLY TRADED RESTAURANT 
FIRMS IN THE UNITED STATES 
Arun Upneja 
The Pennsylvania State University 
University Park, PA, U.S. 
Michael, C. Dalbor 
University of Nevada Las Vegas 
Las Vegas, NV, U.S. 
Seoki Lee 
Temple University 
Philadelphia, PA, U.S. 
and 
Zhenxing Mao 
California State Polytechnic University Pomona 
Pomona, CA, U.S. 
ABSTRACT 
Manipulation of earnings by publicly traded firms is a well-known phenomenon and the subject of 
considerable attention in both academic and trade circles. Despite widespread attention to this topic in financial 
literature it has received scant attention in the restaurant industry. This research assesses whether earnings 
manipulation in the publicly-traded restaurant firms are being rewarded by the capital markets. We have an a priori 
expectation that firms that don’t manipulate earnings will have higher returns. However, our results indicate a 
significant and positive relationship between earnings manipulation indicators and stock price increases.