ABSTRACT
There is a relative absence of research that addresses the role of IPO grading on Earnings management (EM) in India. This study examines the earnings management practices among Indian companies that went for IPOs during the mandatory IPO grading era and the optional IPO grading era. The study covers 351 companies that went public for the first time in India from 2008 to 2022. The study found that the AEM practices proxied by discretionary accruals are decreasing during the grading era and increasing in the optional grading era. On the other hand, REM is found to be increasing in the grading era and decreasing in the optional era.
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Disclosure statement
No potential conflict of interest was reported by the author(s).