Managing for the moment the role of earnings management via real activities versus accruals in SEO valuation S. P. Kothari, Natalie Mizik & Sugata Roychowdhury
Tipo de material:
ArtículoDescripción: Páginas 559 a la 586Tema(s):
En: The accounting review 2016 V.91 No. 2 (Mar)Incluye tablas, figuras y referencias bibliográficasResumen: We assess the role of both accruals manipulation (AM) and real activities manipulation (RAM) in inducing overvaluation at the time of a seasoned equity offering (SEO). Our results reveal that earnings management is most consistently and predictably linked with post-SEO stock market under-performance when it is driven by RAM, in particular, the opportunistic reduction of expenditures on R&D and selling, general and administrative activities. Thus, overvaluation at the time of the SEO is more likely when managers actively engage in more opaque channels to overstate earnings. Our findings are particularly relevant because managers exhibit a greater propensity for RAM at the time of SEOs, even though RAM is more costly in the long run.
| Tipo de ítem | Biblioteca actual | Colección | Signatura topográfica | Info Vol | Copia número | Estado | Fecha de vencimiento | Código de barras | |
|---|---|---|---|---|---|---|---|---|---|
| Revistas | Central Bogotá Sala Hemeroteca | Colección Hemeroteca | 657 (Navegar estantería(Abre debajo)) | 2016 V.91 No. 2 (Mar) | 1 | Disponible | 0000002031463 |
We assess the role of both accruals manipulation (AM) and real activities manipulation (RAM) in inducing overvaluation at the time of a seasoned equity offering (SEO). Our results reveal that earnings management is most consistently and predictably linked with post-SEO stock market under-performance when it is driven by RAM, in particular, the opportunistic reduction of expenditures on R&D and selling, general and administrative activities. Thus, overvaluation at the time of the SEO is more likely when managers actively engage in more opaque channels to overstate earnings. Our findings are particularly relevant because managers exhibit a greater propensity for RAM at the time of SEOs, even though RAM is more costly in the long run.