The relation between derivative and discretionary bad debt expense in the bank industry

• Main Authors: Li-Ping Yen, 顏莉萍
• Other Authors: 薛敏正
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/38548478384372650911

碩士 === 元智大學 === 會計學系 === 93 === This study investigates whether managers using trading or non-trading derivatives and discretionary bad debt expense as partial subsititutes for smoothing earnings. Research samples are collected from Taiwan Listed banks between the first quarter in 2002 and the third quarter in 2004. Both univariate tests and simultaneous multiple regression analyses were use to examine our conjecture. Empirical findings show that there is a significant negative association between derivative notional amounts and the magnitude of discretionary bad debt expense. Also, this negative correlation is stronger for non-trading derivative notional amounts than trading derivative notional amounts. Several additional tests show that our finings are robust.