Venture capital and earnings management in IPOs

• Published in: Brazilian business review Vol. 10; no. 4; pp. 30 - 64
• Main Authors: Gioielli, Sabrina P. Ozawa, Carvalho, Antonio Gledson de, Sampaio, Joelson Oliveira
• Format: Journal Article
• Language: English; Portuguese
• Published: Vitória FUCAPE Business School 30.12.2013
• Edition: English ed.
• Subjects: Annual reports; Corporate governance; Earnings management; Equity; Initial public offerings; Private equity; Reputations; Studies; Venture capital; Brazil

We investigate earnings management (EM) in IPOs and the role of private equity/venture capital (PEVC) in hampering such practice. We show that when analyzing EM, PEVC and non-PEVC-sponsored firms should be treated as different samples: if one splits the sample, R-squared increases drastically for bo...