Earnings Management and Malaysian Corporate Acquisitions
 
The primary objective of the current study is to investigate whether there is any manipulation of accounting earnings through discretionary accrual choices by acquiring firms in the period preceding the announcement and completion of acquisitions.125 sample of share acquiring firms and 158 cash acquiring firms were analyzed over the period 1991-2000. In addition, 125 industry and sized-matched control companies are also selected from the population of non-acquiring firms in that particular year. The control group is used to provide information on how comparable firms, not involved in the acquisition of the sample share-acquiring firms. The results in the current study provide evidence that in the year prior to the acquisition, acquiring firms in share for share acquisitions manage earnings upwards. The result indicates that acquiring firms in Malaysia use accounting procedures in an attempt to increase their share price prior to share for share acquisition.

Back to Listing

 


 

 

 
   
 
Malaysian Accountancy Research and Education Foundation
©Copyright 2007. All Rights Reserved under www.maref.org.my