過去研究指出管理當局在訂定庫藏股決策時，會受到許多誘因影響其決定的制訂與執行，最常見的是訊號傳遞動機及自利動機。本研究在檢視經理人是否會結合盈餘管理和公開市場宣告以做為傳遞訊號的工具。本研究推論，公開市場宣告前的向上盈餘管理會增加公司未來股票購回的成本，故經理人只有在對未來公司表現深具信心時，才會同時使用向上調整盈餘與公開市場宣告兩項工具，以傳遞有利訊號給外部投資人，使投資人對公司的財務揭露更具信心，進而提升股價或增加投資；另一方面，經理人亦有誘因在宣告庫藏股前將盈餘管理做向下調整，以降低未來股票的購回成本及誤導投資人。
為測試上述兩項推論，本研究選取1996年至2006年所有北美上市公司做作樣本，並以宣告前一年的盈餘管理作為區分公司的行為。實證結果發現，向下調整盈餘的公司，其盈餘管理和短期異常報酬有負向關係，顯示經理人有誘因在宣告庫藏股前將盈餘管理向下調整，以誤導投資人並從中獲益；另一方面，向上調整盈餘的公司，其盈餘管理和短期異常報酬無關，顯示經理人亦會在宣告庫藏股前將盈餘管理向上調整以傳達公司績效被低估的訊息，故向上調整盈餘管理可視為公開市場宣告傳遞訊號的加強機制。
本研究亦發現，向下調整盈餘管理的公司，其長期異常報酬為正，且長期股價表現比向上調整盈餘管理的公司來得更好，和過去研究一致，意味著市場無法分辨經理人操弄盈餘的行為。

Although signaling is the most commonly cited explanation for stock repurchases in the academic literature, there is little evidence on signaling instead of nonsignaling purpose. This study examines whether managers use open market share repurchase as a signaling device in conjunction with discretionary accruals by analyzing the association between the pre-repurchase financial reporting behavior and the market reactions around repurchase announcements in order to distinguish open market share repurchases that are conducted for signaling from that are conducted for nonsignaling purposes.
This study covers open market share repurchases announcements of US companies during 1996-2006. We find that managers use earnings inflation prior to open market repurchases to signal undervaluation, suggesting the managers are likely to use discretionary accruals to reinforce the credibility of the repurchase signal to the market. In contrast, managers engaging in earnings deflation are to mislead investors to reduce the repurchase price.
This study also investigates whether investors can see through the false information. We find that repurchasing firms experience positive long-term abnormal returns and long-term abnormal returns for firms engaging in earnings deflation prior to share repurchase announcements is strong than for firms engaging in earnings inflation. These results suggest that market does not identify earnings manipulation when the repurchase is announced.

Arya, A., Glover, J., & Sunder, S. (2003). Is Transparent Financial Reporting Better for Shareholders? Accounting Horizons, 17, 111-116.
Barber, B. M., & Lyon, J. D. (1997). Detecting Long-run Abnormal Stock Returns: The empirical Power and Specification of Test Statistics. Journal of Financial Economics, 43, 341-372.
Bradford, B. M. (2008). Open-Market Common Stock Repurchases and Subsequent Market Performance. Journal of Business & Economic Studies, 14(1), 45-61.
Brav, A., Gecy, C., & Gompers, P. A. (2000). Is the Abnormal Return Following Equity Issuances Anomalous? Journal of Financial Economics, 56, 209-240.
Brennan, M., & Thakor, A. (1990). Shareholder Preferences and Dividend Policy. Journal of Finance, 45, 993-1018.
Comment, R., & Jarrell, G. A. (1991). The Relative Signalling Power of Dutch-Auction and Fixed-Price Self-Tender Offers and Open-Market Share Repurchases. Journal of Finance, 46(4), 1243-1271.
Constantinides, G., & Grundy, B. (1989). Optimal Investment with Stock Repurchase and Financing as Signals. Review of Financial Studies, 2, 445-465.
Demski, J. (1998). Performance Measure Manipulation. Contemporary Accounting Research, 15, 261-285.
Denis, D., & Denis, D. (1993). Managerial Discretion, Organizational Structure, and Corporate Performance: A Study of Leveraged Recapitalizations. Journal of Accounting and Economics, 16, 209-236.
Dann, L. (1981). Common Stock Repurchases: An Analysis of Returns to Bondholders and Stockholders. Journal of Financial Economics, 9, 113-138.
Dann, L., Masulis, R., & Mayers, D. (1991). Repurchase Tender Offers and Earning Information. Journal of Accounting and Economics, 14, 217-251.
Dittmar, A. K. (2000). Why do Firms Repurchase Stock? Journal of Business, 73(3), 331.
Fried, J. (2005). Informed Trading and False Signaling With Open Market Repurchases. California Law Review, 93, 1323-1386.
Fields, T. D., Lys, T. Z., & Vincent, L. (2001). Empirical Research on Accounting Choice. Journal of Accounting & Economics, 31(1-3), 255-307.
Gong, G., Louis, H., & Sun, A. X. (2008). Earnings Management and Firm Performance Following Open-Market Repurchases. Journal of Finance, 63(2), 947-986.
Graham, J., Harvey C., & Rajgopal S. (2005). The Economic Implications of Corporate Financial Reporting. Journal of Accounting and Economics, 40, 3-73.
Grullon, G., & Ikenberry, D. L. (2000). What do we Know About Stock Repurchases? Journal of Applied Corporate Finance, 13(1), 31-51.
Grullon, G., & Michaely, R. (2004). The Information Content of Share Repurchase Programs. Journal of Finance, 59(2), 651-680.
Guay, W., Kothari, S., & Watts, R. (1996). A Market-Based Evaluation of Discretionary Accruals Models. Journal of Accounting Research, 34, 83-105.
Healy, P. M., & Wahlen, J. M. (1999). A Review of the Earnings Management Literature and its Implications for Standard Setting. Accounting Horizons, 13(4), 365-383.
Jones, J. J. (1991). Earnings Management During Import Relief Investigations. Journal of Accounting Research, 29(2), 193-228.
Jolls, C. (1998). The Role of Incentive Compensation in Explaining the Stock-Repurchase Puzzle. Mimeo, Harvard Law School.
Kahle, K. (2002). When a Buyback isn’t a Buyback: Open Market Repurchases and Employee Options. Journal of Financial Economics, 63, 235-263.
Konan, C., Ikenberry, D., & Inmoo, L. (2004). Economic Sources of Gain in Stock Repurchases. Journal of Financial & Quantitative Analysis, 39(3), 461-479.
Lakonishok, J., & Vermaelen, T. (1990). Anomalous Price Behavior Around Repurchase Tender Offers. Journal of Finance, 45, 455-477.
Louis, H., & White, H. (2007). Do Managers Intentionally use Repurchase Tender Offers to Signal Private Information? Evidence From Firm Financial Reporting Behavior. Journal of Financial Economics, 85(1), 205-233.
Maxwell, W., & Stephens, C. (2003). The Wealth Effects of Repurchases on Bondholders. Journal of Finance, 58, 895-920.
Persons, J. (1997). Heterogeneous Shareholders and Signaling With Share Repurchases. Journal of Corporate Finance, 3, 221-249.
Peyer, U., & Vermaelen, T. (2009). The Nature and Persistence of Buyback Anomalies. Review of Financial Studies, 22(4), 1693-1745.
Rau, P. R., & Vermaelen, T. (2002). Regulation, Taxes, and Share Repurchases in the United Kingdom. Journal of Business, 75(2), 245-282.
Siew Hong, T., Ivo, W., & Wong, T. J. (1998). Earnings Management and the Long-Run Market Performance of Initial Public Offerings. Journal of Finance, 53(6), 1935-1974.
Siew Hong, T., Welch, I., & Wong, T. J. (1998). Earnings Management and the Underperformance of Seasoned Equity Offerings. Journal of Financial Economics, 50(1), 63-99.
Subramanyam, K. (1996). The Pricing of Discretionary Accruals. Journal of Accounting and Economics, 22, 249-281.
Vermaelen, T. (1981). Common Stock Repurchases and Market Signalings. Journal of Financial Economics, 9, 139-183.
Vermaelen, T. (1984). Repurchase Tender Offers, Signalling, and Managerial Incentives. Journal of Financial and Quantitative Analysis, 19, 163-181.
Watts, R., & Zimmerman, J. (1986). Positive Accounting Theory. Prentice-Hall, Englewood Cliffs, NJ.