Firm Characteristics and Earnings Management of Different Types of Security Issuers

31 Pages Posted: 13 Jan 2009

See all articles by Hyo Jin Kim

Hyo Jin Kim

affiliation not provided to SSRN

Soon Suk Yoon

Chonnam National University - Department of Economics

Date Written: January 11, 2009

Abstract

We examined what factors discriminate different types of security issuers and whether security issuers engage in different degrees of earnings management using Korean listed firms that issued securities during the period of 2000-2007. We find that plain bond issuers are different from dilutive security issuers but are close to preferred stock issuers. We also find that the issuers of common stocks and dilutive securities share some common characteristics. We document that current and past profitability, size and operating cash flows act as significant factors which discriminate different types of security issuers. Finally, the degree of earnings management differs among different types of security issuers. As compared to common stock issuers, dilutive security issuers tend to have significantly lower accruals and the issuers of plain bonds and preferred stocks tend to have significantly higher accruals. The amount of capital raised per issue has a positive impact on accruals.

Keywords: security issuers, firm characteristics, earnings management, accruals

JEL Classification: M41, M43, G32

Suggested Citation

Kim, Hyo Jin and Yoon, Soon Suk, Firm Characteristics and Earnings Management of Different Types of Security Issuers (January 11, 2009). Available at SSRN: https://ssrn.com/abstract=1325952 or http://dx.doi.org/10.2139/ssrn.1325952

Hyo Jin Kim

affiliation not provided to SSRN ( email )

Soon Suk Yoon (Contact Author)

Chonnam National University - Department of Economics ( email )

77 Yongbongro, Buk-gu, Gwangju
Seoul, 500-757
Korea, Republic of (South Korea)

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