Does Investment Bankers’ Prior Experience in Public Accounting Reduce Earnings Management in IPO Firms?
研究了中国IPO公司中，投资银行家早期在公共会计领域的工作经验是否有助于减少公司的盈余管理行为，发现具有该经验的银行家能有效约束应计盈余管理，且效果在大型、有上市审计资格或曾受监管处罚的会计事务所中更显著。
SUMMARY We examine whether firms undertaking an initial public offering (IPO) exhibit less earnings management when individual investment bankers have prior experience in public accounting. Although auditors are primarily responsible for providing external monitoring of the financial reporting process, individual bankers also have strong incentives to improve accounting quality in firms going public. We predict a negative relation between public accounting experience and IPO firms’ earnings management because working in public practice fosters individual bankers’ accounting expertise and conservative personalities. In exploiting unique disclosures of investment bankers’ identities and characteristics in China, our analysis indicates that bankers with early-career public accounting experience constrain IPO firms’ accrual-based earnings management. Consistent with expectations, we find that this evidence is more pronounced if the accounting firm that employed the future investment banker is larger, is permitted to audit listed companies, and was previously subject to a regulatory sanction. Data Availability: Most data are publicly available from the sources identified in the paper. Hand-collected data from the Securities Association of China (SAC) can be made available upon request. JEL Classifications: G24; M41; M42.