Investor Attention and Earnings Management around the World

This study examines the determinants of earnings management in an international setting using the limited investor attention model of Hirshleifer and Teoh (2003). The model predicts that investor attention reduces earnings management. I use analyst following, institutional ownership, and Big N auditor choice to proxy for investor attention. I have four key findings. First, I document that financial analysts curb earnings management in U.S. …