Earnings Management and Equity Issue Firms - A study in Indian Context

Abstract

The purpose of this paper is to empirically investigate about the engagement of firms in earnings management at the time of issuing equity. Furthermore, we examined if firms issuing domestic equity (IPO) indulge in higher earnings management than firms issuing overseas equity. To estimate the earnings management, accrual-based earnings management (Dechow et al. , 1995) model and real earnings management (Roychowdhury, 2006) model are used respectively.