Earnings Management in Initial Public Offerings
{"Image DocumentName": "Earnings Management in Initial Public Offerings", "Image ImageDescription": "The IPO Process. Opportunities to manage earnings. Lock up period of 180 days. Pressure to meet earnings. In offering prospectus, accounting reports undergo verification of GAAP compliance. Cash flows are the ultimate bottom line for valuation. Now, let\u2019s talk about Earnings Management in Initial Public Offerings. The IPO process gives entrepreneurs the opportunity to manage earnings. After filing an IPO, these entrepreneurs enter a lock up period, usually around 180 days, in which they are not able to sell their personal holdings. This filing comes at a price because the company is pressured to meet their expected earnings in order to avoid a lawsuit. Also, in order to avoid any wrongful manipulation of earnings, the company who is filing for an IPO undergoes GAAP verification of its accounting reports. Overall, the ultimate bottom line for valuation is the company\u2019s cash flows.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}