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Earnings management in public healthcare organizations: the case of the English NHS hospitals

Anagnostopoulou, S.C. and Stavropoulou, C. ORCID: 0000-0003-4307-1848 (2021). Earnings management in public healthcare organizations: the case of the English NHS hospitals. Public Money & Management, doi: 10.1080/09540962.2020.1866854

Abstract

This paper explores whether NHS hospitals in England managed their earnings upward before applying to the government for foundation trust (FT) status—a scheme that allowed them greater financial freedom and management autonomy—in order to present an overly positive picture and increase their chances for a successful application. The paper shows that NHS FTs adjusted discretionary accruals upward for up to two years before applying for FT status. This practice was negatively associated with their future financial performance. Our study contributes to the growing literature on earnings management in the healthcare sector, by taking an event-study approach applied to this sector when significant institutional changes take place.

Publication Type: Article
Additional Information: This is an Accepted Manuscript version of the following article, accepted for publication in Public Money & Management. Seraina C. Anagnostopoulou & Charitini Stavropoulou (2021) Earnings management in public healthcare organizations: the case of the English NHS hospitals, Public Money & Management. It is deposited under the terms of the Creative Commons Attribution-NonCommercial License (http://creativecommons.org/licenses/by-nc/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited.
Publisher Keywords: earnings management, institutional transition, NHS Foundation Trusts, financial performance, healthcare, hospitals
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine
Departments: School of Health Sciences > Healthcare Services Research & Management
Date available in CRO: 18 Jun 2021 10:34
Date deposited: 18 June 2021
Date of acceptance: 7 July 2020
Date of first online publication: 13 January 2021
URI: https://openaccess.city.ac.uk/id/eprint/26303
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