A Research of Relationship among Accounting Conservatism and Employee Bonuses

• Main Authors: Yu-lung Tseng, 曾友龍
• Other Authors: Yu-hui Su
• Format: Others
• Language: zh-TW
• Online Access: http://ndltd.ncl.edu.tw/handle/43114105257616417334

碩士 === 東吳大學 === 會計學系 === 95 === In U.S.A, after several financial fraud cases (Enron and WorldCom, etc.) were brought to light in 2001, relevant decrees, such as The Sarbanes-Oxley Act, were enforced to strengthen a company's operating and supervision mechanism and to enhance financial statement users’ confidence. In Taiwan, the issue of whether financial statements reveal the actual condition of a company has also caused wide public concern. Accounting conservatism implies that in order to enhance the credibility of financial statements, a company should neither overestimate assets or profits nor underestimate liabilities or losses when facing uncertainty. On the other hand, because of relevant regulations in Taiwan, bonuses are viewed as an allocation of profit rather than expenses. For this reason, there is a general discussion over the employee profit sharing plan. This research infers that employee bonuses granted on the basis of accounting surplus would enhance the self-interest motive of a corporate manager. Moreover, a director with the qualification to get bonuses and make crucial decisions would exert an influence on accounting conservatism. In addition, this research also examines how employee bonuses affect accounting conservatism when it adopt market price to account for surplus after tax. The study samples are listed companies in Taiwan from 2002 to 2005, and Basu（1997）model is regarded as a foundation model. The results of this research show companies with the employee profit sharing plan tend to have lower accounting conservatism. Furthermore, higher percentage of directors who are not managers in the board of directors does not show the characteristic of accounting conservatism according to the extended Basu model. As for the additional test, regression test under the extended Basu model indicates this percentage does not affect accounting conservatism apparently.