The Impact of Accounting Frauds on Labor Markets: Evidence from Bankruptcies and M&As

Jung Ho Choi, Brandon Gipper and Fiona Sequeira

CES Technical Notes Series from Center for Economic Studies, U.S. Census Bureau

Abstract: This technical note investigates the organizational changes of accounting-fraud firms to understand and improve the quality of internal firm identifiers in the Business Register Bridge (BRB) of the Census data. Accurate internal firm identifiers are important because firm-level employment statistics aggregate establishment-level employment information based on internal firm identifiers in the Census data. This technical note uses researcher-provided data from the SEC Accounting and Auditing Enforcement Releases (AAERs) to identify accounting-fraud firms, the UCLA-LoPucki Bankruptcy Research Database (BRD) to identify fraud firm bankruptcies, Thomson ONE to identify fraud firm M&As, and Compustat to provide firm characteristics. After linking these external data sets to the Census data including the LBD and LEHD and performing various match rate analyses, this note makes three main contributions: (1) The note documents the overall match rates between external and Census data for firms in our sample, showing that accounting-fraud firms have higher match rates, with potential reasons such as firm size delineated. (2) The note documents the overall match rates, as well as pre and post-2000 rates, between external and Census data for bankruptcy-fraud firms, exploring specific cases of inconsistency in both the LBD and the merged LBD-LEHD data. (3) This note provides descriptive statistics about the number and rate of accounting-fraud firms that experience M&A activities in the three-year post-fraud period.

Keywords: LBD; LEHD (search for similar items in EconPapers)
Date: 2023-12
New Economics Papers: this item is included in nep-acc, nep-bec and nep-sbm
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