| Summary: | 碩士 === 國立臺北大學 === 合作經濟學系 === 93 === Due to the accounting fraud of Enron, much of the earnings management (EM) research focus on profit organizations. Do non-profit organizations also exist any dishonesty? We examine the Credit Unions of the U.S.
The paper first discusses that as credit unions add unrelated groups and expand, the prospects for separation between ownership and control increase, creating potential agency problems. We finds that agency problems grow as credit union add membership and members.
Second, we studies three kinds of EM: earnings losses avoidance, earnings aggressiveness, and earnings smoothing. We find agency problems may exacerbate EM and thus insiders (managers) will engage in higher extent of EM to mask their rent-seeking activities from outsiders (members).
This paper examines the relationship between the agency problem, membership welfare, and financial transparency of credit unions. Financial data are available from NCUA (National Credit Union Administration) custom report data base for 61,541 cu (credit union) -years between 1994 and 2003. And we find that the higher level of agency problem, the higher level of EM and the lower level of financial transparency. But managers may promote member’s welfare by way of earnings smoothing.
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