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Earnings Management Around Share Repurchases: A Note
Author(s) -
Vafeas Nikos,
Vlittis Adamos,
Katranis Philippos,
Ockree Kanalis
Publication year - 2003
Publication title -
abacus
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.632
H-Index - 45
eISSN - 1467-6281
pISSN - 0001-3072
DOI - 10.1111/1467-6281.00130
Subject(s) - accrual , earnings management , shareholder , business , sample (material) , accounting , exploit , earnings , work (physics) , control sample , monetary economics , finance , economics , corporate governance , mechanical engineering , chemistry , computer security , chromatography , computer science , engineering , food science
This work examines a subset of the important area of earnings management. Specifically, it seeks to identify the extent of earnings management preceding self‐tender offers for a sample of U.S. firms. Pre‐repurchase total accruals and discretionary current accruals were found to be somewhat lower for a sample of self‐tendering firms compared to a sample of industry‐ and performance‐matched control firms. Weak evidence of post‐buyback accruals reversal is also presented. The evidence is weakly consistent with the notion that share repurchases are employed by managers to exploit shareholders through earnings management.