Sample versus Control Companies
The final sample consisted of 74 companies that manipulated earnings, which were matched to 2,332 Compustat nonmanipulators by two-digit SIC industry and year for which the financial statement data used in the model were available.
The distribution of manipulators by two-digit SIC groups indicates a concentration of companies in manufacturing (SIC 30–39) and personal and business ser-vices (SIC 70–79), which together represented 45 percent of the sample. Of the 63 four-digit SIC codes represented, only 4 companies were in software (SIC 7372), 3 were in computers (SIC 3571), and 3 were in audiovisual retail stores (SIC 5731).