An Analysis of Earnings Management and Seasoned Equity Offerings before and during a Crisis

The Thesis Paper is called “An Analysis of Earnings Management and Seasoned Equity Offerings before and during a Crisis ”. The main goal of this work is to make an analysis of earnings management, considering the state of economy factor of european market by estimating regression. The results include the analysis of predicted discretionary accruals in relation to real company reporting, the analysis of underperformance during crisis and non-crisis periods and building a realistic model, which can be used in the future. The work suggests considering previous studies, revealing the topic of detecting Earnings Management, discretionary accruals models, the underperformance of companies, importance of SEO-factor; description of the methodology, using the model, based on modified Jones Model to analyse the performances of the given companies in terms of the state of the economy and results discussion. The problem is the absence of analyses of whether the relationship between earnings management and SEO depends on the state of the economy in European companies. In this work the 2 Hypotheses are tested: I - The level of earnings management among European NON-SEO companies is lower than in SEO-companies; I - which makes our research special and new - the difference in the level of earnings management among SEO companies and NON-SEO companies is different during the CRISIS, comparing to NON-CRISIS period.