Title: Earnings management in mergers and acquisitions: A review of the literature
Authors: Creemers, Wouter ×
Craninckx, Katrien
Huyghebaert, Nancy #
Issue Date: 2014
Publisher: Intersentia
Series Title: Review of Business and Economic Literature vol:58 issue:3 pages:230-259
Abstract: Corporate accounting scandals over the last two decades have shown that managers who are eager to expand the size of their company use accepted accounting techniques to infl ate their earnings prior to an acquisition. Th is article reviews the literature on earnings management by acquirers. Overall, this literature has shown that considerable manipulations of earnings take place preceding the announcement of a takeover deal. Moreover, larger deals tend to be associated with more earnings management, as evidenced by a positive and significant
association between relative deal size and acquirer discretionary accruals. Finally, earnings
management is also associated with lower abnormal stock performance around an M&A announcement, while the negative association between pre-acquisition earnings management
and long-term abnormal stock performance suggests that investors are unable to adequately off set the effects of earnings management upon M&A announcement.
ISSN: 2034-7677
VABB publication type: VABB-1
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Research Center Finance, Leuven
Faculty of Economics and Business (FEB), Campus Carolus Antwerp - miscellaneous
Faculty of Economics and Business (FEB) - miscellaneous
× corresponding author
# (joint) last author

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