Browsing by Author "Chiu, Yung-Chin"

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Do firms manipulate earnings before accelerated share repurchases?
(2015-05-01)
Chiu, Yung-Chin
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Liang, Woan-lih
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資訊管理與財務金融系註：原資管所+財金所
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Department of Information Management and Finance
This paper investigates whether firms engaging in accelerated share repurchases (ASRs) conduct downward earnings management prior to repurchase announcements. The \'commitment\' and high \'speed\' of share repurchases in ASRs appear to give ASR firms stronger incentive to deflate the pre-repurchase earnings than open market repurchase (OMR) firms, in order to reduce repurchase costs. However, in contrast to the OMRs of Gong, Louis, and Sun (2008), we do not find such earnings management for ASR firms. We conjecture that the Sarbanes-Oxley Act and greater public attention to financial reporting after financial scandals reduce the likelihood that ASR firms adopt accrual-based earnings management. (C) 2014 Elsevier Inc. All rights reserved.