scholarly journals Is There the Difference of Business monitoring between Set-up Investment Company backed Firms and New Technology Financing Company ? : Based on Earnings Management around Initial Public Offerings

2019 ◽  
Vol 39 (1) ◽  
pp. 55-81
Author(s):  
송치승
Keyword(s):  
Earnings Management ◽  
Initial Public Offerings ◽  
New Technology ◽  
Investment Company ◽  
Public Offerings ◽  
The Difference ◽  
Set Up

scholarly journals Is Window-Dressing around Going Public Beneficial? Evidence from Poland

2019 ◽  
Vol 12 (1) ◽  
pp. 18 ◽  
Author(s):  
Joanna Lizińska ◽  
Leszek Czapiewski
Keyword(s):  
Earnings Management ◽  
Stock Returns ◽  
Initial Public Offerings ◽  
Going Public ◽  
Financial Reports ◽  
Public Offerings ◽  
Ipo Performance ◽  
Company Value ◽  
The Difference

The informativeness of financial reports has been of a great importance to both investors and academics. Earnings are crucial for evaluating future prospects and determining company value, especially around milestone events such as initial public offerings (IPO). If investors are misled by manipulated earnings, they could pay too high a price and suffer losses in the long-term when prices adjust to real value. We provide new evidence on the relationship between earnings management and the long-term performance of IPOs as we test the issue with a methodology that has not been applied so far for issues in Poland. We use a set of proxies of earnings management and test the long-term IPO performance under several factor models (CAPM, and three extensions of the Fama-French model). Aggressive IPOs perform very poorly later and earn severe negative stock returns up to three years after going public. The difference in returns in accrual quantiles is statistically significant in almost half of methodology settings. The results seem to suggest that investors might not be able to discount pre-IPO abnormal accruals and could be overoptimistic. Once the true earnings performance is revealed over time, the market makes downward price corrections.

scholarly journals Role Of Underwriters In Restraining Earnings Management In Initial Public Offerings

2012 ◽  
Vol 28 (4) ◽  
pp. 709 ◽  
Author(s):  
Hei Wai Lee ◽  
Yan Alice Xie ◽  
Jian Zhou
Keyword(s):  
Earnings Management ◽  
Initial Public Offerings ◽  
The Internet ◽  
Venture Capitalists ◽  
Font Size ◽  
Going Public ◽  
Public Offerings ◽  
Investment Bankers ◽  
Sarbanes Oxley

<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; mso-pagination: none;" class="MsoNormal"><span style="font-family: Times New Roman;"><span style="font-size: 10pt;">We investigate the </span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;">relationship</span><span style="font-size: 10pt;"> between underwriter</span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;"> reputation</span><span style="font-size: 10pt;"> and earnings management of IPO firms over the period of 1991-2005. We find that </span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;">IPO firms engage in less earnings management</span><span style="font-size: 10pt;"> if </span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;">they</span><span style="font-size: 10pt;"> are underwritten by prestigious investment bankers. Furthermore, the role of prestigious underwriters in restraining earnings management of IPO issuers do not change during the Internet Bubble period or after the passage of the Sarbanes-Oxley Act (SOX). The findings support the certification role of underwriters in the IPO process.<span style="mso-spacerun: yes;"> </span>We also document that</span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;"> firms going public in the post-SOX period engage in less earnings management compared to firms going public in the pre-SOX period</span><span style="font-size: 10pt;">. Further findings suggest that the changing objectives of venture capitalists may explain the reduction in the level of earnings management of IPO firms following the passage of SOX.</span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>

State Ownership and Earnings Management around Initial Public Offerings: Evidence from China

2015 ◽  
Vol 14 (2) ◽  
pp. 89-116 ◽  
Author(s):  
C. S. Agnes Cheng ◽  
Jing Wang ◽  
Steven X. Wei
Keyword(s):  
Earnings Management ◽  
Path Analysis ◽  
Initial Public Offerings ◽  
Equity Markets ◽  
State Ownership ◽  
Bank Loans ◽  
Chinese Firms ◽  
Public Offerings

ABSTRACT This study investigates earnings management by firms around their initial public offerings (IPOs) in domestic Chinese equity markets. Using a sample of 437 IPO firms, we find that Chinese firms tend to inflate earnings around their IPOs. We also show that state-owned enterprises (SOEs) manage earnings to a lesser degree than non-state-owned enterprises (NSOEs) do around IPOs. Furthermore, using path analysis, we find that two incentive factors, CEO shareholding and accessibility to bank loans, explain 48 percent of the correlation between state ownership and earnings management for IPO firms. In particular, accessibility to bank loans is a more important incentive factor that leads to less earnings management for SOEs than NSOEs.

scholarly journals Earnings Management and Performance of IPO Firms: Evidence from India

2019 ◽  
Vol 12 (1) ◽  
pp. 39-58
Author(s):  
Deepa Mangala ◽  
Mamta Dhanda
Keyword(s):  
Earnings Management ◽  
Initial Public Offerings ◽  
Coming Out ◽  
Developed Countries ◽  
Annual Reports ◽  
Financial Reports ◽  
Public Issues ◽  
Public Offerings ◽  
Long Run ◽  
Earnings Performance

Disclosure through corporate annual reports is intended to enhance transparency and reduce information asymmetry during public issues. Ritter (1991) revealed that there is something fishy in the financial reports of the companies coming out with public issues. Earnings management has been recognised as a foremost contributor to such misleading financial reports. The short term overperformance of initial public offerings (IPO) of companies increases the expectations of potential investors and leads to a subsequent decline of performance in long run leaving the investors in distraught. The observed phenomenon is omnipresent and thus affects the investors across the globe. The present article empirically investigates the presence of earnings management in IPOs in India. The study is based on Modified Jones Model, the best known model to measure accruals earnings management. Preliminary results exhibit that earnings management in Indian IPOs is much higher than in developed countries. The study further discovers that the earnings performance of IPO companies is abnormally higher in IPO year as compared with post-offer period. Both the results taken together reinforce that post-issue earnings performance is a derivation of issue year earnings management in India.

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