title: EARNINGS MANAGEMENT IN U.S. HOSPITALS.
abstract: OBJECTIVE
  This paper examines the hospital management practices of manipulating financial earnings within the bounds of generally accepted accounting principles (GAAP).
  
  
  METHODS
  We conduct regression analyses that relate earnings management to hospital characteristics to assess the economic determinants of hospital earnings management behavior.
  
  
  METHODS
  From the CMS Cost Reports we collected hospital financial data of all U.S. hospitals that request reimbursement from the federal government for treating Medicare patients, and regress discretionary accruals on hospital size, profitability, asset liquidity, operating efficiency, labor cost, and ownership.
  
  
  RESULTS
  Hospitals with higher profit margin, current ratio, working capital, days of patient receivables outstanding and total wage are associated with more earnings management, whereas those with larger size and higher debt level, asset turnover, days cash on hand, fixed asset age are associated with lower level of earnings manipulation. Additionally, managers of non-profit hospitals are more likely to undertake some form of window-dressing by manipulating accounting accruals without changing business models or pricing strategies than their public hospital counterparts.
  
  
  CONCLUSIONS
  We provide direct evidence of the use of discretionary accruals to manage financial earnings among U.S. hospitals and the finding has profound policy implications in terms of assessing the pervasiveness of accounting manipulation and the overall integrity of financial reporting in this very special public and quasi-public service sector.
authors.forename: Gang Nathan
authors.initials: GN
authors.lastname: Dong
mesh_terms: D014487:Centers for Medicare and Medicaid Services, U.S.; D005377:Financial Management, Hospital / Q000458:organization & administration*; D006801:Humans; D014481:United States