Avrundar företag sina resultat - En studie av Cosmetic Earnings Management i Sverige

Sammanfattning: The aim of this thesis is to examine the occurrence of Cosmetic Earnings Management (CEM) among Swedish companies. CEM refers to the small upward rounding of reported net income to reach cognitive reference points. Important cognitive reference points are multiples of ten (N'10^x) of reported net income and rounding towards these has been documented in other markets around the world over the last 20 years. The occurrence of CEM on the Swedish market is studied using digital analysis, frequency testing and Benford's law. Firstly, reported net income of publicly traded companies between 1996 and 2010 is examined. This net income data is then studied in subsets based on factors with indicated covariance with general Earnings Management. Factors studied are the implementation of IFRS in 2005, profitability and leverage. Finally, a study is conducted on a large set of data from privately held Swedish companies between 2005 and 2010. While only partial CEM-patterns are identified in the majority of the data studied, indications of CEM among highly leveraged companies are found for Net Income Available to Common Equity. The conclusion of the study is that CEM seems to be a limited phenomenon on the Swedish market. This study also brings forward the limitations of the research method as such and calls for more research and model development within the field of CEM.