Resultatmanipulering innan notering och framtida avkastning : på den skandinaviska kapitalmarknaden

Do Scandinavian companies manage their earnings prior to initiating an IPO and if so, how does that affect their subsequent market performance? Prior studies have been able to identify the use of earnings management prior to companies going public, leading to increased initial equity value, followed by negative returns compared to the market as a whole. In this study we examine the relation between discretionary accruals as an approximation of earnings management for companies listed on the three major Scandinavian stock exchanges through 2005-2017, and their abnormal returns as an approximation of post-IPO market performance. Discretionary accruals are measured in two categories, total discretionary accruals and discretionary short-term accruals, being more directly related to earnings increasing earnings management. Both measurements are divided as fractions of total assets making them comparable throughout the market. We find that companies total discretionary accruals on average are positive, indicating that accrual increasing earnings management is used prior to being brought to the public market. The average companies’ discretionary current accruals are negative, separating the results found in the Scandinavian markets from prior research in the field. As we study their subsequent market performance, we find that an increased level of discretionary short term accruals, earnings increasing earnings management is negatively related to abnormal returns