This study examines whether earnings surprise management is related to the time-series property of historical\r\nearnings series (i.e., earnings persistence). The findings from my analysis indicate that firms with a higher level of\r\nearnings persistence are less likely to manipulate the earnings surprise to achieve meeting or beating earnings\r\nexpectations (MBE) than firms with a lower level of earnings persistence. Further, I find that, while the market discounts\r\nthe managed earnings surprise, it is less likely for firms with higher earnings persistence. This suggests that\r\nthe capital market understands the role of earnings persistence in mitigating the manager�s incentive for managing\r\nthe earnings surprise to attain MBE.
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