| Summary: | 碩士 === 中國文化大學 === 會計研究所 === 94 === This thesis examines the influence of accountant's industrial specialized ability and client’s bargaining ability on conservatism. Previous literatures find that accountant’s industry specializations are better able to identify errors and are a mitigating factor of earnings management. However, several financial frauds happened in abroad and inter-nal recently for several years. Investors has don’t trust the accountant's profession and the accountant could detect and persuade their clients to recognize economic losses in earnings in a timely fashion. Therefore, I use the reverse regression of Basu (1997) to examine the influence of accountant's industrial specialized ability and client’s bargain-ing ability on conservatism.
The empirical results show that earnings in Taiwan demonstrate the characteristic of earnings conservatism, and this means earnings is more timely and sensitive in re-flecting publicly available bad news than good news. We find that the clients’ convey-ances to the financial statement audited by the low industrially professional accountant are more conservative than the ones audited by the high industrially professional ac-countant. This result is contrary to the previous researches. Besides, we also find that the accountant will be affected by the client’s bargaining ability when they asked their clients’ financial statements to be more conservative. Finally, we also find that the ac-countant whose industrially professional ability higher will have more bargain ability with their clients than the lower ones.
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