Initial research focusing on the association between institutional ownership and earnings manipulation mainly utilizes variables based on R&D expenditures as proxies of managerial discretion (Graves, 1988; Hill & Hansen, 1989; Hansen & Hill, 1991; Baysinger, Kosnik & Turk, 1991; Eng, 1995; Bushee, 1997; Majumdar & Nagarajan, 1997; Bushee, 1998). Cuts or increases in firms’ expenditures regarding these long-term investments can be utilized as tools of earnings management. However, together with the advances in theoretical and empirical literature related to the generation of aggregate accrual models, measures other than R&D related proxies are introduced into econometrical models in this array of empirical studies. Furthermore, the improvements in literature related to accruals management increased the generalizability of the theories since this method of earnings management can be used by all firms and is not as costly as investments in R&D (Koh, 2007).