Analysis of Earning Management and Financial Forecast of Distressd Companies

• Main Authors: Wen-Tan Wang, 王文坦
• Other Authors: Lin-Fen Lin
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/19862082385690385302

碩士 === 國立成功大學 === 會計學系碩博士班 === 93 === 　Financial statements of a company are usually an appraisal warranty of an investor to understand a business managed situation. In resent years, financial crisis have occurred passim. Most of this kind of companies often window and adjust their earnings in financial statement before the crisis occur and try to disguise the truth of their bad management. The technique of disguised not only appeal in the financial statement, but also in the financial forecast from the corporation. There are some distressed companies often issue wrong forecast information, and these information has mislead many investing decision made by investors. My research adopt discretionary accruals to analyze distressed companies manager whether do earning management or not. My research try to help understand manager how to manipulate discretionary accruals before the financial crisis explode. I adopt two different models to calculate the discretionary accruals :(1) Cash-flow model (2)Modified Jones model. Also my research uses the forecast data from corporation to compare with the actual number, try to realized what’s the difference between normal and distressed companies. The empirical results show that: 1.The discretionary accruals fluctuation both in Cash-flow model and Modified Jones model, we can find that the trend of distressed companies they are the same. When the day of crisis explosion get closer , the manager manipulate to turn worse . And in the year between t and t- 1 , the discretion accruals manipulated by corporation elapse. 2.The discretionary accruals my research calculated in Cash-flow model, we can find that when the year discretionary accruals are positive , the degree of manager manipulate in distressed companies is more than the others ;when the year discretionary accruals are negative , the degree of manager manipulate in distressed companies and the others has no significant difference .In Modified Jones model empirical result , no matter whether the discretionary accruals positive or not , the degree of manager manipulate in distressed companies is more than the others. 3.The financial forecast in revenue and net income both in distressed and normal companies demonstrate that managers often overestimate their revenue and earnings. In earning forecast error aspect, two samples have no significant difference in 2000; in 2001, distressed companies error has a significant difference more than normal companies. In revenues forecast error aspect, two samples have no significant difference in 2000; in 2001, normal companies error has a significant difference more than distressed companies.