IPO Firms’ Earnings Quality in Poland Around the Crisis
IPO Firms’ Earnings Quality in Poland Around the Crisis

Summary/Abstract: Purpose – The study examines the properties of discretionary accruals for Polish companies around initial public offerings (IPOs) in the pre and post-crisis years. Design/methodology/approach – The subsamples covered IPO firms going public before the crisis (2002– 2006) and after the height of the crisis (2009–2013). Discretionary accruals as proxies for earnings quality were estimated according to the DeAngelo model and the modified Jones model in the cross-sectional version. Findings – IPO firms have positive, relatively high issue-year abnormal accruals followed by negative abnormal accruals in subsequent years. The results suggest that IPO firms engage in more aggressive incomeincreasing earnings management. Originality/value –The study covers IPOs on the Warsaw Stock Exchange in Poland. The earnings quality of Polish IPOs around this issue has not been examined so far.

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