Do Insiders Manipulate Earnings when they Sell their Shares in an Initial Public Offering

By M. Darrough, Srinivasan Rangan. 2005

228 citations recorded by the source corpus.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/6838f6dd6b37b8cc30e1566ae9dbe0ac5563ac41

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In Accounting

1. Weili Ge
2. Mohammad Alhadab
3. Geert Braam
4. Catherine Schrand
5. Daniel A. Cohen
6. Monomita Nandy
7. Suman Lodh
8. I. Clacher

In Strategy and Management

1. Weili Ge
2. Mohammad Alhadab
3. Daniel A. Cohen
4. Catherine Schrand
5. I. Clacher
6. Geert Braam
7. Monomita Nandy
8. Suman Lodh

Citations in the corpus

• Do Venture Capitalists Influence the Decision to Manage Earnings in Initial Public Offerings (2006, unknown): “Does Earning Management Constraint Explain Superior VC-Backed Long-Run Returns? Teoh et al. (1998b) show that earnings management at the time of the IPO can explain the long-run stock return underperformance of IPO firms.”
• Tunneling as an incentive for earnings management during the IPO process in China (2010, background): “Darrough and Rangan (2005) show that managers are more likely to under-invest in R&D in order to increase current reported earnings during the pre-IPO period.”
• The use of advertising activities to meet earnings benchmarks: evidence from monthly data (2010, background): “…the 2005 third-quarter conference call, “we plan to cap our marketing spending just like we did in Q3 and meet our earnings guidance” 4 In contrast, Darrough and Rangan (2005) discuss reducing R&D before an Initial Public Offering, to influence the offering price, and not short-term earnings…”
• Earnings Quality and Ownership Structure: The Role of Private Equity Sponsors (2009, unknown): “…VCs. Cohen and Langberg (2008) document that reported accounting earnings are less informative for VC-backed firms than for non-VC-backed firms, and Darrough and Rangan (2005) find that some VCs’ share sales in the year of the IPO are negatively associated with R&D spending changes, consistent…”
• Understanding Earnings Quality: A Review of the Proxies, Their Determinants and Their Consequences (2010, background): “, 2010); and three studies on insider trading (Beneish, 1999; Summers and Sweeney, 1998; Darrough and Rangan, 2005).”
• Accrual-based and real earnings management and political connections (2015, background): “Darrough and Rangan (2005) and Mizik and Jacobson (2008) argue that greatest effect of accrual-based and real earnings management would be attained through a coordinated use of both tools.”
• Real and accrual earnings management and IPO failure risk (2015, background): “It is common within the earnings management literature to use agency theory and incomplete contracting to motivate earnings management research in accounting (see, e.g. Warfield et al. 1995; Darrough and Rangan 2005, Wongsunwai 2012).”
• The impact of audit quality on real and accrual earnings management around IPOs (2017, background): “2 Consistent with this view, Darrough and Rangan (2005) find that managers reduce R&D expenses at the end of the IPO year to manage earnings upward.”
• The relationship among board of director characteristics, corporate social performance and corporate financial performance (2009, background): “In their investigation into research and development expenditures, Darrough and Rangan (2005) suggest that some managers may over-invest in R&D if they believe that such spending conveys favorable information about the quality of management and the firm’s future prospects (signaling theory), whereas”
• The Valuation of Biotech IPOs (2005, unknown): “While Kim and 10 Darrough and Rangan (2005) find when the insiders plan to sell their pre-offering shareholdings in an IPO, the firm tends to spend less in R&D to increase current earnings at the expense of future earnings.”
• Attracting investor attention through advertising (2014, background): “7See, for example, Teoh, Wong, and Rao (1998); Teoh, Welch, and Wong (1998a,b); Darrough and Rangan (2005); abnormal accruals and/or a decrease in discretionary spending (e.g., R&D spending) in the few years before initial public offerings (IPO) and seasoned equity offerings (SEO), in order to…”