Does the monitoring role of buyout houses improve discretionary accruals quality?
MetadataShow full item record
Using a sample of reverse leveraged buyout (‘reverse-LBO’) firms, I find that discretionary accruals quality (AQ), the quality of accruals that are subject to management discretion, significantly improves from pre-LBO to post-reverse LBO. Moreover, buyout houses’ board seats and the length of firms’ stay-in-private periods are significant explanatory variables for the cross-sectional variation in discretionary AQ for post-reverse-LBO firms. My findings suggest that the monitoring provided by private equity buyout houses improves discretionary AQ, consistent with the view of Jensen (1989a,b) that LBOs are a solution to ineﬃciencies that arise from agency problems.
The article of record as published may be found at http://dx.doi.org/10.1111/j.1467-629X.2010.00351.x
Showing items related by title, author, creator and subject.
Fabby, James G. (Monterey, California. Naval Postgraduate School, 2001-12);Acquisition reform has resulted in many changes throughout DoD procurement. The draw down of the workforce and financial constraints demand acquisition professionals conduct business in a smarter, more efficient manner. ...
Weant, Matthew S. (Monterey, California: Naval Postgraduate School, 2013-09);Reverse proxy servers are valuable assets to defend outside hosts from seeing the internal network structure upon which the reverse proxy is serving. They are frequently used to protect valuable files, systems, and internal ...
Stephens, Gary D. (2001-06);Acquisition reform has attempted to change the procurement process over the past several years. Some believe the reform measures have been changes in policy or revisions of a paperwork process. The draw down of the workforce ...