This study investigates acquiring firms' earnings management (EM) strategies around mergers and acquisition (M&A) in the US market and analyzes firm's post-acquisition performance. Acquirers are shown to use both accruals management (AM) and real earnings management (REM), both prior to and...

The accounting literature has found evidence that acquirers in stock-for-stock M&A have typically managed earnings upwards ahead of a bid. Other literatures have concluded that, when stock prices are high and rising, M&A is higher, more M&A is financed with stock, market sentiment and...

This study investigates how the gap in goodwill accounting between the Japanese local accounting standards (Japanese Generally Accepted Accounting Principles) and international accounting standards (International Financial Reporting Standards) is related to the likelihood of firms adopting...

For an M&A context, this paper investigates stock payment acquirers' trade-off strategy between accruals-based earnings management (AM) and real earnings management (REM) and it impacts on firm's post-acquisition performance during the period before and the period after the Sarbanes-Oxley Act...

Using data from the Chinese A-share market in 2004-2012, this paper shows how cognitive bias of individual analysts lead to counter-productive effect in less-developed financial markets. We form an ex-ante measure of analysts' expectation error, a measure suitable for markets with short history....

This study examines the incidence of earnings management around the privatizations of State Owned Enterprises in Pakistan during 1991-2005. Using the modified Jones model and a sample of large privatizations (minimum US$1 million), it shows that the sampled firms experienced increase in...

In response to the recent debate on the media, this paper examines the effect of media coverage on firm earnings management. Even if prior studies (Miller 2006; Dyck et al. 2010) have documented the media's role in detecting and deterring accounting fraud (or extreme earnings management), it is...

This study conducts the first analysis of the influence of private communication on earnings management. Results show that private communication can curb earnings management; the constraining effect of private communication on earnings management is greater when the number of external...

This paper examines whether high-ability managers’ earnings smoothing is motivated by the need to mitigate the adverse effects of heightened information asymmetry triggered by mergers and acquisitions (M&As) on managers’ reputation capital (job loss) and firm value. We document that...

We study the causal effects of short selling on real earnings management by exploiting an exogenous shock to short selling costs under the pilot program of Regulation SHO. We find the removal of short selling constraints leads to a reduction of real earnings management in pilot firms relative to...