Graduate School of Business


Doctor of Business Administration (DBA)


Yongli Luo


Earnings Management, COVID-19, Pandemic, Political cost, Executive compensation




This study examines the potential use of big bath earnings management (BBEM) techniques in the leisure and travel industries during the pandemic of 2020. Data is collected through Compustat and Mergent Online databases and then merged for analysis using SPSS 27. First, the preliminary t-test shows the possibility of the firms in these industries to have conducted BBEM. After, modified Jone's model is used to distinguish discretionary from non-discretionary accruals. Using multiple regression analysis, three hypotheses are tested to discover whether the year of the pandemic, political costs, and executive compensation had any significant effect on the use of discretionary accruals on the use of big bath earnings management. The analysis results show that the year of the pandemic and the political cost had significant effects on the use of discretionary accruals. However, no significant relationship is found between executive compensation and discretionary accruals. The results of this study are consistent with the prior studies that political cost and economic crisis have a significant correlation with earnings management; however, prior research found a significant association between executive compensation and earnings management which was not found in this study.

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