Earnings management prior to mergers and acquisitions: The role of acquirers’ ownership structures. Evidence from Poland

摘要

The purpose of the study is to identify earnings management behaviour prior to mergers and acquisitions with a particular emphasis on the role of acquirers’ ownership structures. We build panel regression models describing the associations between earnings management proxies and measures of mergers and acquisitions with additional variables describing elements of acquirers’ ownership structures. In the study, we confirm that acquirers do not engage in upward management prior to mergers and acquisitions. We find, however, that managerial ownership reduces magnitudes of total upward real earnings management. The presence of institutional investors diminishes accrual-based upward earnings management prior to mergers and acquisitions.