Earnings management around seasoned equity offerings: The case of Vietnam
Main Article Content
Abstract
The primary of this study is to examine the accrual-based earnings management and real activities manipulation in the company that has seasoned equity offerings on the Vietnam exchange. We use four models from Dechow et al. (1995); Roychowdhury (2006); Gunny (2010) to measure earnings management in 824 cases from 2008 to 2018. Consistent with the previous research, seasoned equity issuers can raise reported earnings prior to the offering by altering discretionary accounting accruals and engage in real activities manipulation, such as acceleration of the timing of sales through increased price discounts or more lenient credit terms
Article Details
Keywords
Accrual-based earnings management; real activities manipulation; seasoned equity offering (SEO)
References
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Beyer, A. (2009). Capital market prices, management forecasts, and earnings management. The Accounting Review, 84(6), 1713-1747.
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Chi, W., Lisic, L. L., & Pevzner, M. (2011). Is enhanced audit quality associated with greater real earnings management? Accounting horizons, 25(2), 315-335.
Cohen, D. A., & Zarowin, P. (2010). Accrual-based and real earnings management activities around seasoned equity offerings. Journal of Accounting and Economics, 50(1), 2-19.
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Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1995). Detecting earnings management. The Accounting Review, 193-225.
Fan, Q. (2007). Earnings management and ownership retention for initial public offering firms: Theory and evidence. The Accounting Review, 82(1), 27-64.
Graham, J. R., Harvey, C. R., & Rajgopal, S. (2005). The economic implications of corporate financial reporting. Journal of Accounting and Economics, 40(1), 3-73.
Gunny, K. A. (2010). The relation between earnings management using real activities manipulation and future performance: Evidence from meeting earnings benchmarks. Contemporary Accounting Research, 27(3), 855-888.
Healy, P. M. (1985). The effect of bonus schemes on accounting decisions. Journal of Accounting and Economics, 7(1-3), 85-107.
Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. The American economic review, 76(2), 323-329.
Jiraporn, P., Miller, G. A., Yoon, S. S., & Kim, Y. S. (2008). Is earnings management opportunistic or beneficial? An agency theory perspective. International Review of Financial Analysis, 17(3), 622-634.
Jones, J. J. (1991). Earnings management during import relief investigations. Journal of Accounting Research, 29, 193-228.
Kothari, S. P., Leone, A. J., & Wasley, C. E. (2005). Performance matched discretionary accrual measures.
Journal of Accounting and Economics, 39(1), 163-197.
Phạm Thị Bích Vân. (2017). Quản trị lợi nhuận khi phát hành thêm cổ phiếu của các công ty niêm yết trên thị trường chứng khoán Việt Nam. (Luận án Tiến sĩ), Trường Đại học Đà Nẵng,
Roychowdhury, S. (2006). Earnings management through real activities manipulation. Journal of Accounting and Economics, 42(3), 335-370.
Teoh, S. H., Welch, I., & Wong, T. J. (1998a). Earnings management and the long-run market performance of initial public offerings. The Journal of Finance, 53(6), 1935-1974.
Teoh, S. H., Welch, I., & Wong, T. J. (1998b). Earnings management and the underperformance of seasoned equity offerings. Journal of financial economics, 50(1), 63-99.
Xu, R. Z., Taylor, G. K., & Dugan, M. T. (2007). Review of real earnings management literature. Journal of Accounting Literature, 26, 195-228.
Zang, A. Y. (2012). Evidence on the trade-off between real activities manipulation and accrual-based earnings management. The Accounting Review, 87(2), 675-703.
Ball, R., & Shivakumar, L. (2008). Earnings quality at initial public offerings. Journal of Accounting and Economics, 45(2), 324-349.
Beyer, A. (2009). Capital market prices, management forecasts, and earnings management. The Accounting Review, 84(6), 1713-1747.
Bushee, B. J. (1998). The influence of institutional investors on myopic R&D investment behavior. The Accounting Review, 305-333.
Cheng, S. (2004). R&D expenditures and CEO compensation. The Accounting Review, 79(2), 305-328. Cheung, C. S., & Krinsky, I. (1994). Information asymmetry and the underpricing of initial public offerings:
Further empirical evidence. Journal of Business Finance & Accounting, 21(5), 739-747.
Chi, W., Lisic, L. L., & Pevzner, M. (2011). Is enhanced audit quality associated with greater real earnings management? Accounting horizons, 25(2), 315-335.
Cohen, D. A., & Zarowin, P. (2010). Accrual-based and real earnings management activities around seasoned equity offerings. Journal of Accounting and Economics, 50(1), 2-19.
Dechow, P. M., & Skinner, D. J. (2000). Earnings management: Reconciling the views of accounting academics, practitioners, and regulators. Accounting horizons, 14(2), 235-250.
Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1995). Detecting earnings management. The Accounting Review, 193-225.
Fan, Q. (2007). Earnings management and ownership retention for initial public offering firms: Theory and evidence. The Accounting Review, 82(1), 27-64.
Graham, J. R., Harvey, C. R., & Rajgopal, S. (2005). The economic implications of corporate financial reporting. Journal of Accounting and Economics, 40(1), 3-73.
Gunny, K. A. (2010). The relation between earnings management using real activities manipulation and future performance: Evidence from meeting earnings benchmarks. Contemporary Accounting Research, 27(3), 855-888.
Healy, P. M. (1985). The effect of bonus schemes on accounting decisions. Journal of Accounting and Economics, 7(1-3), 85-107.
Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. The American economic review, 76(2), 323-329.
Jiraporn, P., Miller, G. A., Yoon, S. S., & Kim, Y. S. (2008). Is earnings management opportunistic or beneficial? An agency theory perspective. International Review of Financial Analysis, 17(3), 622-634.
Jones, J. J. (1991). Earnings management during import relief investigations. Journal of Accounting Research, 29, 193-228.
Kothari, S. P., Leone, A. J., & Wasley, C. E. (2005). Performance matched discretionary accrual measures.
Journal of Accounting and Economics, 39(1), 163-197.
Phạm Thị Bích Vân. (2017). Quản trị lợi nhuận khi phát hành thêm cổ phiếu của các công ty niêm yết trên thị trường chứng khoán Việt Nam. (Luận án Tiến sĩ), Trường Đại học Đà Nẵng,
Roychowdhury, S. (2006). Earnings management through real activities manipulation. Journal of Accounting and Economics, 42(3), 335-370.
Teoh, S. H., Welch, I., & Wong, T. J. (1998a). Earnings management and the long-run market performance of initial public offerings. The Journal of Finance, 53(6), 1935-1974.
Teoh, S. H., Welch, I., & Wong, T. J. (1998b). Earnings management and the underperformance of seasoned equity offerings. Journal of financial economics, 50(1), 63-99.
Xu, R. Z., Taylor, G. K., & Dugan, M. T. (2007). Review of real earnings management literature. Journal of Accounting Literature, 26, 195-228.
Zang, A. Y. (2012). Evidence on the trade-off between real activities manipulation and accrual-based earnings management. The Accounting Review, 87(2), 675-703.