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Event-specific earnings management : additional evidence from US M & A pre-and post-SOX.

Alsharairi, M. and Dixon, R. and Al-Hamadeen, R. (2017) 'Event-specific earnings management : additional evidence from US M & A pre-and post-SOX.', Journal of financial reporting and accounting., 15 (1). pp. 78-98.

Abstract

Purpose We re-examine the motivation to manage earnings in US M&As, by investigating whether the enactment of SOX has affected pre-merger earnings management. Design/methodology/approach Using a sample of over 700 completed M&As of US public firms during 1999-2008. Using quarterly reports, we track-down earnings management during the four quarters preceding the deal and consequently draw inferences about the implications of SOX on interim reporting practices. Findings Using a sample of over 700 completed M&As of US public firms during 1999-2008. Using quarterly reports, we track-down earnings management during the four quarters preceding the deal and consequently draw inferences about the implications of SOX on interim reporting practices. Originality/value Unlike what is anticipated regarding earnings management practices after SOX, the study reveals significant evidence of upward earnings management by firms engaging in M&A in post-SOX era.

Item Type:Article
Full text:(AM) Accepted Manuscript
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Status:Peer-reviewed
Publisher Web site:https://doi.org/10.1108/JFRA-11-2015-0097
Publisher statement:This article is © Emerald Group Publishing and permission has been granted for this version to appear here http://dro.dur.ac.uk/19165/. Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited.
Date accepted:11 June 2016
Date deposited:30 June 2016
Date of first online publication:10 April 2017
Date first made open access:No date available

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