摘要：This paper investigated the earning management behavior of private equity offering firms. We founded that firms have incentives to engage in earnings management before the announcement date of private equity offerings. The manipulation direction may be upward or downward according to the types of placement. Our empirical results indicated that management tended to manage reported earnings upward when the private placement was subscribed by non-insiders; whereas management tended to downward manage earnings when the private placement was subscribed by insiders. We speculated the reasons for the latter being that insiders downward managed earnings in order to depress the subscription price for the benefit of their self-interests. In a word, the paper suggested that the direction of earnings management was decided by whether insiders were involved in the private placement.
