Earnings Manipulation by Zombie Firms

Organizer

University of Aberdeen Business School

Date:

April 18th, 2025 (UTC+1)

Symposium Chair

Dr. Naser Makarem

Assistant professor in University of Aberdeen

Dr. Naser Makarem is an assistant professor in accounting at the University of Aberdeen, UK. He is the leader of MSc Accounting and Finance programme and Partnerships Programmes Director at Aberdeen Business School. Dr Makarem teaches several courses in the area of financial accounting both in the UK and at overseas partners in China and Qatar. He supervises PhD students and has research interests in the broad area of financial reporting and particularly earnings management.

Dr. Makarem’s research mainly focuses on factors influencing corporate financial reporting. In particular, he studies how social, economic and political factors affect earnings management. He is also interested in changes in earnings management behaviour over time as well as the impact of regulatory environment and political and economic factors on such changes. He also studies how earnings manipulation is restricted by factors such as external audit and corporate governance.

Call for Papers

Background:

Zombie firms are those that continue to operate even though they are economically unviable due to subsidies, low-interest loans, or other forms of external support. Typically, they have low productivity and low profitability, with interest coverage ratios that are sustainably below the operational threshold. Long periods of low interest rates-as well as crisis-era financial policies like those enacted during and following the 2008 financial crisis-have been blamed for perpetuating zombie firms globally. This has been one of the unintended consequences of such policies, which have allowed these firms easier access to credit so they could continue operating.

Research also shows that persistent zombie firms contribute to resource misallocation, depressing overall economic productivity. Moreover, external support provided to these firms typically presents incentives for opportunistic behaviour by their managers, such as earnings management to mask financial distress, which in turn undermines market transparency and creditor decision-making. The objective is to help regulators and monetary authorities design regulatory and monetary reforms that advance economic efficiency and financial stability.

Goal/Rationale:

Studying earnings manipulation by zombie firms is important for a number of reasons. First, zombie firms are expected to manipulate earnings so as to make their financial health seem better than it actually is. This decreases the reliability of the financial reports. Such deception affects stakeholders' capability to make appropriate decisions. It distorts the allocation of capital in financial markets. Second, zombie firms mislead creditors into continuing their supply of funds by using accrual-based or real earnings management to artificially inflate profitability, which exacerbates the possibility of loan defaults and further perpetuates systemic financial instability. Third, zombie firms’ survival, which is at least to some extent facilitated by earnings manipulation, locks up resources that would otherwise be better utilized by more productive firms. Understanding how zombie firms circumvent financial and regulatory systems through manipulation can be helpful in policymaking by ensuring that measures intended to support viable firms do not perpetuate inefficiencies. This study highlights the need for stricter oversight to enhance market efficiency and stability.

Topics

The main topics of this symposium are listed below.

Management

Advertising
Business Performance Management
Decision Sciences
Development Planning and Policy
Entrepreneurship
Human Resource
Information Systems
Information Technology Management
Labor Relations & Human Resource Management
Management Information Systems

Operations Research
Organizational Behavior & Theory
Production/Operations Management
Public Administration and Small Business Entrepreneurship
Public Relations
Public Responsibility and Ethics
Strategic Management
Systems Thinking
Time Management
Total Quality Management

Finance

Business Intelligence
Business Information Systems
Corporate Finance and Governance
Digital Financial Intermediation
Finance & Investment

Financial Risks and Capital Flows
Global Business
International Finance
Prices, Business Fluctuations, and Cycles

Meanwhile, submissions aligned with the overall conference theme are also welcome.

Economics

Economic Development
Comparative Economic Systems
Consumer Behavior
Economic Systems
Financial Economics
Household Behavior and Family Economics
Industrial and Manufacturing
International Economics

Labor Economics
Law and Economics
Market Structure and Pricing
Marketing Research and Strategy
Public Choice
Productivity and Economic Growth
Regulatory Economics
Travel/Transportation/Tourism
Welfare Economics

Business

Business analysis
Techniques, Methodologies, and Models
Enterprise and Company Analysis
Requirements Planning and Management
Requirements Analysis and Documentation
Strategic Analysis and Design

Innovating
Vendor and Tools Track
Data Modeling
Business Process Modeling
Soft Skills and Competencies
Architectural Frameworks
Business Rules
Object-oriented Analysis
Structured Analysis

Highlights

The "Earnings Manipulation by Zombie Firms" workshop on April 18, 2025, at the Sir Duncan Rice Library, University of Aberdeen, was one of the in-demand and engaging sessions that attracted participants with varied academic and professional backgrounds.

One of the session's highlights was the presentation of new research exploring how financially struggling "zombie" firms may turn to earnings manipulation as a means of concealing their real economic condition and continuing to raise capital. The topic is also timely in light of recent worries about financial disclosure and market efficiency.

The presentation was made by Dr Naser Makarem, assistant professor of accounting at the University of Aberdeen, who provided an overview of literature, research methods, findings and conclusions. The presentation also had some policy implications with practical suggestions for regulators, auditors, and scholars.

All participants showed keen interest throughout, and live debates and thought-provoking questions contributed to the lively atmosphere of the session. The workshop promoted relevant interaction and stressed the importance of continued research in financial reporting and corporate governance, which indeed made it a valuable experience for all.

Access to Symposium: ICMRED 2025 Symposium - - Aberdeen - YouTube

Submission

Prospective authors are kindly invited to submit full papers that include title, abstract, introduction, tables, figures, conclusion and references. It is unnecessary to submit an abstract in advance. The deadline for general submission is April 11, 2025.

Each paper should be no less than 4 pages. One regular registration can cover a paper of 6 pages, and additional pages will be charged. Please format your paper well according to the conference template below before submission. Paper Template Download

Please prepare your paper in both .doc/.docx and .pdf format and submit your full paper by email with both formats attached directly to sympo_aberdeen@icmred.org

Important Dates:

Submission & Payment

Type	Specific Information
Paper Submission Deadline	April 11, 2025
Review Process	2 weeks
Revise & Acceptance	2 weeks
Registration & Payment	2 weeks

Fees

Fees (VAT Included)	Amount
Registration and Publishing Fee (6 pages included)	$450
Additional Page	$40/extra page

Publication

Accepted papers will be published in Advances in Economics, Management and Political Sciences (AEMPS) (Print ISSN: 2754-1169) and will be submitted to Conference Proceedings Citation Index (CPCI), Crossref, CNKI, Portico, Google Scholar, and other databases for indexing. The situation may be affected by factors among databases like processing time, workflow, policy, etc.

Proceeding Title: Advances in Economics Management and Political Sciences (AEMPS)
Press: EWA Publishing, United Kingdom
ISSN: 2754-1169 2754-1177 (electronic)

* The papers will be exported to production and publication on a regular basis. Early-registered papers are expected to be published online earlier.

This symposium is organized by ICMRED 2025 and it will independently proceed the submission and publication process

Venue:

University of Aberdeen, King's College, Aberdeen AB24 3FX, UK

How to Participate:

Attend in person

If you want to attend the symposium on-site, please email sympo_aberdeen@icmred.org. The symposium seats are limited. Both contributors and non-contributors who wish to participate in the symposium in person need to apply to the symposium organizers.

VISA:

Welcome to GOV.UK (www.gov.uk)

In order to ensure the information is correct and up to date, there may be changes which we are not aware of. And different countries have different rules for the visa application. It is always a good idea to check the latest regulations in your country. This page just gives some general information of the visa application.

UK Visa Information

What you need to do

Check if what you plan to do in the UK is allowed as a Standard Visitor.
Check you meet the eligibility requirements.
Check if you need to apply for a visa to visit the UK.
Apply for a Standard Visitor visa online - if you need one.

Check you meet the eligibility requirements
You must have a passport or travel document to enter the UK. It should be valid for the whole of your stay.

You must be able to show that:

you'll leave the UK at the end of your visit
you're able to support yourself and your dependants during your trip (or have funding from someone else to support you)
you're able to pay for your return or onward journey (or have funding from someone else to pay for the journey)
you'll not live in the UK for extended periods through frequent or successive visits, or make the UK your main home

Check if you need a visa to visit the UK

Depending on your nationality, you'll either:

have to apply for a Standard Visitor visa before you travel to the UK
be able to visit the UK for up to 6 months without needing a visa

You can check if you need a visa before you apply.
If you do not need a visa, you must still meet the Standard Visitor eligibility requirements to visit the UK. You may be asked questions at the UK border about your eligibility and the activities you plan to do.