Private equity ownership and financial misreporting

Wang, Shuyang

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https://hdl.handle.net/2142/108247 Copy

Description

Title

Private equity ownership and financial misreporting

Author(s)

Wang, Shuyang

Issue Date

2020-04-13

Director of Research (if dissertation) or Advisor (if thesis)

Li, Laura Yue

Doctoral Committee Chair(s)

Li, Laura Yue

Committee Member(s)

• Chen, Clara Xiaoling
• Zhu, Wei
• McClane, Jeremy

Department of Study

Accountancy

Discipline

Accountancy

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

• Private equity
• financial reporting quality
• misreporting
• corporate governance

Abstract

I study whether private equity (PE) ownership is associated with portfolio firms’ financial misreporting by examining the occurrence of restatements and SEC enforcement actions during the post-IPO period. Using a sample of firms that went public between 1998 and 2015, I find that PE-backed firms are more likely to issue restatements during the five-year post-IPO period than non-PE-backed firms. The restatements received by PE-backed firms are more material, i.e., having a more negative impact on net income or longer duration. Furthermore, PE-backed firms are more likely to be subject to SEC Accounting and Auditing Enforcement Releases (AAERs). Cross-sectional analyses suggest that the financial misreporting of PE-backed firms is attributable to PE firms’ pursuit of profits as well as their control over the board and executives. Overall, this paper provides new insights into the opportunistic influence of PE firms.

Graduation Semester

2020-05

Type of Resource

Thesis

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http://hdl.handle.net/2142/108247

Copyright and License Information

Copyright 2020 Shuyang Wang

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