Many papers have been written on the “kink” in the earnings distribution, which exhibits surprisingly few small negative realizations, and surprisingly many realizations at or just above zero.  Let the financial reporting researchers argue about whether the kink is statistically robust or whether it reflects earnings management (operational or otherwise).  Managerial accountants Indjejikian, Matejka, Merchant and Van der Stede show a similar result in internal earnings targets:  very few negative targets, and very many right at zero.  They also provide very interesting results on how the distribution changed with the onset and continuation of the recession.  I’m still not sure what it mean for interpreting the distribution of publicly-reported earnings, but the paper (pdf) is worth a look.