To consider the international trend and enhance the global competitiveness of Taiwan enterprises, the Government committed to convert the domestic accounting standards to International Financial Reporting Standard (IFRS). Taiwan Statement of Financial Accounting Standards (SFAS) No.10, ¡§Inventories¡¨, was revised to adopt IFRS and effective on January 1, 2009 under this background. New SFAS No.10 has different rules on inventory evaluation and has significant impacts on inventory decision-making and operating profits, which may cause much high pressure on companies¡¦ operating performance. Based on this assumption, this research would like to know whether adopting the new SFAS No.10 can affect earnings management behavior by studying the relations between inventories related financial factors and accrual-based earnings management.
This research takes the absolute value of discretionary accruals (ADA) from the Modified Jones Model as a measuring indicator of earnings management; and selects six sequential quarterly financial statements of listed companies in Taiwan Stock Exchange Market before and after adopting new SFAS No.10. The total sampling periods are twelve quarters from the third quarter of 2007 to the second quarter of 2010. The empirical results of this study are summarized as follows:
1.After adopting New SFAS No.10, the levels of using discretionary accruals for earnings management are significantly reduced.
2.Gross Profit Margin and Inventory Turnover Rate both have significant correlations with using discretionary accruals for earnings management.
3.Companies have shorter product life cycles are more evident in using discretionary accruals for earnings management.
4.Fixed Assets to Total Assets Rate and Provision of Inventory Loss both have no significant correlations with using the discretionary accruals for earnings management.
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0130112-180810 |
| Date | 30 January 2012 |
| Creators | Su, Hui-fang |
| Contributors | Chi-Homg Tseng, Pei-how Huang, Cher-Min Fong, Mei-Chiun Tseng |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | Cholon |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0130112-180810 |
| Rights | user_define, Copyright information available at source archive |
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