Extensions
Research into classification shifting as a tool for earnings management is relatively new and potentially could be expanded much further. An important issue to solve in future models is that of identifying and isolating the effects of classification shifting from other effects that may be correlated to it. Furthermore, other types of classification shifting (apart from moving expenses down) could be explored as well as well as comparison in between countries accounting for the effect of financial market development, accounting and disclosure standards, regulation, etc.
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