| Summary: | 碩士 === 東吳大學 === 會計學系 === 95 === In recent years, as the financial fraud occurs one after another; authority, accountants, and the companies themselves have taken a more conservative attitude toward the society in providing financial information. Conservatism means that when in uncertain situations, an accountant must discreetly evaluate those correlated accountings; further, he has to offer a practical estimation of possible loss and charges neither overstate property and profit nor understate debt and loss. Previous studies have discovered that under the environments of high litigation risk, conservatism rises. On the other hand, this research anticipates that under low litigation risk of the prolonged time after the fraud; the authority and the accountants will reduce the pressure of conservatism to the company. Hence, the motive of the company earnings management will emerge gradually and subsequently reduce the conservatism. Focusing on the litigation, this research is going to explore whether the fluctuation of conservatism in Taiwan is affected by the extension of the time after the breaking out of the fraud.
The studied samples in this research are the public companies in Taiwan taken from 1991 to the first half of 2006. By taking every half year as a research unit, to measure the conservatism in each sample, this research examines the relation between earnings and stock price, the changing time-series properties of earnings, cash flows and accruals, and market-to-book ratio, and the ratio of market-to-book. The result of this research shows that there does exist the earnings management by increasing the earnings in the public companies. Nevertheless, from a long-term viewpoint on the conservatism of the public companies, conservatism is founded to be definitely existed, and the fluctuation of it is consistent with the environments of litigation risk.
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