A Study of Preliminary Earnings―Determinants and the Effects on Auditor Changes

• Main Authors: Hsu, Jui-Lung, 許瑞隆
• Other Authors: 趙雅儀
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/73071511464720495105

碩士 === 國立彰化師範大學 === 會計學系 === 93 === SFC amended in November 2001 that TSE and OTC companies, which had publicly released financial forecasts, must disclose the mandatory preliminary earnings, in one month after the end of the financial year. Though the mandatory preliminary earnings are relevant information, its reliability should be investigated. As a result, this study aims to find the factors affecting the difference between the mandatory preliminary earnings and the audited earnings. Research sample contains the companies required to disclosure mandatory preliminary earnings from 2001 to 2003. The study finds that abnormal accruals, shares mortgaged by inside directors, and independence of auditors are positively correlated with the absolute difference between mandatory preliminary earnings audited earnings. The shares held by institutional directors is negatively correlated with the absolute difference between mandatory preliminary earnings audited earnings. The empirical results support that litigation risk of auditors, characteristics of board, and auditors’ independence would affect the reliability of mandatory preliminary earnings. External users should keep an eye on this information when making relevant decision. On the other topic, we research the relationship between the difference of the mandatory preliminary earnings and auditor changes. The company which overestimates their mandatory preliminary earnings in higher level trend to switch the auditor. And the type of auditor switching is changed from big five to non-big five.