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Earnings Management: A Way to Show Strength: The Financial Facades during IPOs: Evidence from Northern Europe
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
2019 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Background: -Researchers have provided evidence that managers mislead stakeholders with organizational façades in the non-financial reports. However, few, if any, studies have studied if the reported information in financial reports is used in the same way.

 

Purpose: -The purpose of this study is to investigate if managers use earnings management as a façade or organized hypocrisy.

 

Method: -This study uses panel data analysis to test if managers use discretionary accruals earnings management to report inconsistent earnings in the years adjacent to the IPO. The authors selected 44 companies that performed an IPO between 2009 and 2017.

 

Conclusion: -Using a sample of 330 firm-year observations, the authors find a negative correlation between the year of the IPO and discretionary accruals earnings management. In contrast to previous research, the discretionary accruals did not offer a significant difference from the average. The findings offer similarities to both the decision, the action and the talk criteria discussed in organizational façade literature.

Place, publisher, year, edition, pages
2019. , p. 39
Keywords [en]
Discretionary accruals, Organizational façades, Information asymmetry, IPO, Earnings management
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-43880ISRN: JU-IHH-FÖA-2-20190799OAI: oai:DiVA.org:hj-43880DiVA, id: diva2:1319298
Subject / course
JIBS, Business Administration
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Available from: 2019-06-14 Created: 2019-05-30 Last updated: 2019-06-14Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
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