| Summary: | 碩士 === 中國文化大學 === 會計研究所 === 90 === This research is targeting on the public trading electronic companies listed on the Taiwan Stock Exchange Corporation for the period between 1998 and 2000. It tries to discuss the managers using derivatives and discretionary accruals as partial substitutes for smoothing earnings, and analyze the reasons behind financial instruments hedging whether these hedging activities are resulted from the behaviors of the managements, financial debt, growth option, risk exposure, firm size, dividend policy, liquidity, or the other reasons.
The results find a significant negative association between derivatives’ notion amounts and proxies for magnitude of discretionary accruals. In addition, the R&D ratio, the exporting ratio and the firm size positively correlated with using of the derivative hedging, which is consistent with our prediction. And the bonus of CEO, the stock of CEO, short debt ratio and cash cycle are negatively association with the using hedging activities, which is not consistent with our expectations. However, the proxy for the bonus of CEO and the stock of CEO did not meet the standard of significant negative association. The bonus of CEO, debt-equity ratio and dividend yield positively corre-lated with derivative hedging scale, which is consistent with our prediction. The short debt ratio is significant negative with our prediction.
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