| Summary: | 碩士 === 國立臺灣大學 === 會計學研究所 === 92 === There are private and public banks in the bank industry in Taiwan. The differences between those two kinds of banks, such as stock structure and internal process, result in some significant dissimilarity about bank operational decision-making. This study is preparing to examine whether private and public banks have differences in earnings management. After analyzing the incentives of banks to manage earnings, there is something being found: (1) the equity diffusion of private banks may cause the higher frequency of earnings management in order to affect the evaluation of the bank made by small shareholders; (2) the employment and discharge of managers of public banks are almost entirely controlled by the government, and then earnings is comparatively lesser relative. According to the former, we expect the private banks in Taiwan manage earnings more than the public ones.
This study examines samples of private and public banks in Taiwan between Year 80 to 90. We find that the earning performance of private banks, relative to public banks, has three charactistics: (1) the discountinuity of the ΔROE distribution is more significant in the point of ΔROE=0; (2) reporting more small increases of equity returns; (3) reporting longer strings of consecutive earnings increases. In accordance with Burgstahler and Dichev (1997) and others, these charactistics are attributable to earnings management. Consequently, the empirical results show that private banks in Taiwan do perform more earnings management than public ones.
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