Author Type

Graduate Student

Date of Award

2024

Document Type

Dissertation

Publication Status

Version of Record

Submission Date

October 2026

Thesis/Dissertation Advisor [Chair]

Kohlbeck, Mark

Abstract

I investigate the link between real earnings management and customer satisfaction. Following the passing of the Sarbanes-Oxley Act, which requires public companies to ensure the accuracy of their financial reporting, the use of non-accrual based methods to achieve financial earnings targets has become commonplace. Nonaccrual-based methods consist of decisions that curtail firm activities, which increase net income; however, these methods come at the cost of future operations. These opportunistic behaviors in the service, retail, and hospitality industries impact customers and a firm's long-term value. I hypothesize that the outcome will be lower customer satisfaction and service quality. I use firms’ publicly available financial information to detect real earning management (REM) of selling, general, and administrative (SG&A) expenses to understand how firms operate. Physical changes to a firm’s operating environment through these financial actions are immediately observable, generating negative electronic word of mouth. I use text analysis software to determine if the comment is positive or negative and the strength of the customers' sentiment, allowing me to observe the harmful effects of reducing SG&A expenses through the lens of the customer. In addition, I use American Customer Satisfaction Index (ACSI) scores to provide an overall assessment. I regress my customer satisfaction and service quality measures on the REM measure to test the hypotheses on the impact of REM. Further, I analyze and establish the link between REM's impact on the firm's sales growth rates.

Extent

111 p.

Comments

Includes bibliography.|Dissertation (PhD)--Florida Atlantic University, 2024.|FAU Electronic Theses and Dissertations Collection|Includes bibliography.

Identifier

FA00014504

Format

pdf

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