EARNINGS MANAGEMENT AND MALAYSIAN CORPORATE ACQUISITIONS

  • Rashidah Abdul Rahman Accounting Research Institute (ARI) Universiti Teknologi MARA, Shah Alam, Malaysia
  • Afidah Abu Bakar Accounts Manager Langkawi, Malaysia

Abstract

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 analysed over the period 1991-2000. In addition, 125 industry and size-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 acquisition from 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 upward. 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.
Published
Jun 25, 2004
How to Cite
ABDUL RAHMAN, Rashidah; ABU BAKAR, Afidah. EARNINGS MANAGEMENT AND MALAYSIAN CORPORATE ACQUISITIONS. Management & Accounting Review (MAR), [S.l.], v. 3, n. 1, p. 29-42, june 2004. ISSN 2550-1895. Available at: <http://arionline.uitm.edu.my/ojs/index.php/MAR/article/view/518>. Date accessed: 31 oct. 2020. doi: http://dx.doi.org/10.24191/mar.v3i1.518.