Earnings management, stock issues, and shareholder lawsuits

• 成果类型: Article
• 署名作者: DuCharme, LL; Malatesta, PH; Sefcik, SE
• 署名单位: University of Washington; University of Washington Seattle
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(03)00182-X
• 发表日期: 2004
• 页码: 27-49
• 关键词: earnings management; stock offers; shareholder lawsuits; ipos; SEOs

摘要

Abnormal accounting accruals are unusually high around stock offers, especially high for firms whose offers subsequently attract lawsuits. Accruals tend to reverse after stock offers and are negatively related to post-offer stock returns. Reversals are more pronounced and stock returns are lower for sued firms than for those that are not sued. The incidence of lawsuits involving stock offers and settlement amounts are significantly positively related to abnormal accruals around the offer and significantly negatively related to post-offer stock returns. Our results support the view that some firms opportunistically manipulate earnings upward before stock issues rendering themselves vulnerable to litigation. (C) 2003 Elsevier B.V. All rights reserved.