Earnings Management by Acquiring Firms. The Impacts of Earnings Management on Market Performance of Malaysian Acquiring Firms

      Аннотация: This book examined the relationship between earnings management and performance of acquiring firms in Malaysia during period of 2004-2010. Earnings management measured by discretionary accruals derived from modified Jones model and firm’s performance estimated by monthly Cumulative Abnormal Return. Firms are selected from both listed cash and share acquirers firms on Bursa Malaysia in the period of 2004-2010. This study consists of two steps. In the first step, it examines whether acquirer firms manipulate their earnings prior to acquisition announcement dates and in the second step, it measures the effects of earnings management on performance of acquirer firms by means of simple regression. The results indicated that share acquirer firms unlike cash acquirers manipulated their earnings preceding acquisition announcement date. Furthermore, they presented a negative relationship between earnings management preceding and performance of firms following the acquisition date for share acquirer firms.

Ключевые слова: Earnings Management, Firm’s Performance, Mergers and Acquisitions, cumulative abnormal return, Jones Model, Total Accruals, Discretionary Accruals