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

TABLE 4: 
T-test Results for Combined Industry during Recession vs. Non-recession 
Recession 
1991,2 
1991,2 1991,2 1991-98 
Years 2001,2 2001 2002 
DA from Total Accruals Approach
 
7011 & 
1.2436 
1.6629* 
1.6174 
0.9585 
7990 
(-0.0981) 
DA from Current Accruals Approach
 
7011 & 
-1.3716 
-1.8412* 
-1.6523 
-0.8726 
7990 
(-0.0673) 
The figures in the parentheses represent p-values from the t-tests.
CONCLUSIONS 
In order to test whether the gaming industry manipulates earnings using accruals, the study conducts Total 
accrual and Current accruals approach to extract DA (earnings management portion). The study also identifies the 
recession years to be 1991, 1992, 2001, and 2002 to account for any changes in mean DA within industry and have 
them compared to non-recession years. The idea of dividing years into two separate groups (recession vs. non-
recession) is to detect whether gaming firms manage earnings differently during the industry recognized recession 
versus non-recession periods.
As explained in the Regression Analysis section, the authors first wanted to make sure that the gaming 
firms are not behaving in its own systematic way. In order to assess if there exists any firm related earnings 
management affect, the research employs recession-related dummy variables and concluded that the residuals 
exhibit no significant affects. Two test results the authors made after including group dummy variable are; 1) based 
on the t-test of the two groups of regression residuals to check if they are significantly different. The test result 

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