![]() This study provides additional insight into the understanding of how the security structure may impact firms’ financial disclosure behavior. The results imply that the stapled security structure may signal lower-quality of financial disclosure for firms than the unstapled security structure. ![]() Evidence shows that stapled A-REITs and LIFs use a greater magnitude of EM approaches than unstapled entities. Stapled Securities means the units of the Company comprised of Notes and Common Shares, in such proportions as are specified in such units, which units shall be deemed stapled together, and such Notes and Common Shares so stapled are transferrable or exchangeable only together until separated in accordance with the terms thereof. 2011 had the definition stapled security in this subsection come into. ![]() This empirical research analyzes a panel dataset that contains information of Australian REITs (A-REITs) and Listed Infrastructure Funds (LIFs) from the year of 2000–2017. stapled security, of a particular entity at any time, means a particular security. Therefore, the stapled structure is expected to induce increased EM behavior and signal a lower level of financial disclosure quality than the unstapled structure. Stapled security could comprise two or more of the same or legally different instruments, for example, a share in a company and a unit in a trust. Trusts and firms under stapled securities are exposed to various managerial opportunities and activities that can provide the flexibility of using EM approaches. Stapling simply means that two different securities are 'stapled' together for the purposes of trading or transfers. This paper is the first study to explore whether the stapled structure influences firms’ activities in earnings management (EM). A Goodman Group stapled security is one fully paid ordinary share in Goodman Limited, one fully paid unit in Goodman Industrial Trust and one CHESS Depository Interest (CDI) in respect of a fully paid ordinary share of Goodman Logistics (HK) Limited which are stapled so that they can only be traded together.
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