Industry-level comparison of earnings management on Philippine IPO firms (1998-2007)

• Main Authors: Dayrit, Amyleen Joy E., Dulay, Poulla Monica R., Lee, Franz Aedelynne A., Silva, Katrina B.
• Format: text
• Language: English
• Published: Animo Repository 2008
• Subjects: Going public (Securities) > Philippines; Corporations > Philippines > Finance; Accounting
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/14001
• Institution: De La Salle University

In order to conribute to the existing literature on earnings management, the researchers investigate the extent of earnings management employed on 9 Philippine firms that have undergone initial public offering from 1998-2007. The researchers used the cross-sectional modified Jones (1999) model to measure the amount of discretionary accruals, which serve as the proxy for earnings management. The researchers find that companies engage in earnings management before IPO. They concluded that the level of earnings management is higher on IPO firms compared to that of the listed firms. The study also states that the relationship between stock returns volatility and the level of discretionary accruals is insignificant. Moreover, evidence shows the negative relationship between the level of earnings management and firm size.