A Study On The Association Between Accounting Treatment For Processing Subcontract And Stock Market

• Main Authors: Hsiao-Fen, Wen, 溫小芬
• Other Authors: Yu-Hui, Su
• Format: Others
• Language: zh-TW
• Published: 1999
• Online Access: http://ndltd.ncl.edu.tw/handle/48817397567672854431

碩士 === 東吳大學 === 會計學系 === 87 === This study investigates whether electronic industry firms employ earnings management and window dressing to influence financial statement through the transaction characteristic of the processing subcontract and accounting choices, and examines the stock market consequences after the enforcement actions by the SEC during in 1997. We adopt six methods to distinguish the sample to the purchase and sales type of accounting treatment or subcontracting one. The sample consists of 74 electronic industry firms in Taiwan from 1996 to 1997. Empirical results indicate that the companies'' stock return increments of the purchase and sales type of accounting treatment are higher than those of the companies which adopt subcontracting accounting treatment. We conclude the companies can window dress financial statement through purchase and sales type of accounting choices, and achieve the purpose of rising stock returns. In addition, the firms adopting the purchase and sales type of accounting treatment, their stock returns before the date of financial statements are higher than those after the date of financial statements behind the SEC restricts that kind of accounting treatment at the end of 1997. Moreover, around the dates of financial statements, the companies'' stock return decrements of the purchase and sales type of accounting treatment are higher than those of the companies adopting subcontracting one. We conclude that SEC''s action effect stock market at the end of 1997 indeed.