EARNINGS MANAGEMENT 655
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" Figure 18.8. Twelve conditional distributions: exploring the relative importance of
thresholds. Note: the appendix provides motivation and construction details for the
τand τT=Pstatistics. Values in excess of 2.0 reliably reject the null hypothesis of no
threshold effect. Whenever the values of the statistics are found to be in excess of
2.0 at the suspected thresholds for the above cases, they also prove to the largest rel-
ative to similar computations for all other points; the last panel reporting a
τT=P=1.50 also obtains the largest value in its neighborhood.