| Summary: | 碩士 === 朝陽科技大學 === 會計所 === 96 === Inspired by the studies of Leland & Pyle (1977) and Li & McConomy (2004), this study examines whether IPO firms use discretionary accruals, earnings forecast, and ownership retention to signal their stock value and how the two signals, i.e. discretionary accruals and earnings forecast, interact in initial public offerings.
Following Gul et al. (2003), I adopt the positive discretionary accruals to proxy informative earnings management and negative discretionary accruals proxy conservative earnings management, then, examine the valuation implication of discretionary accruals and earnings forecast. Furthermore, Hughes (1986) and Fan (2007) suggest that signals act as substitutes in a multiple-signaling environment. In contrast with non-IPO empirical results, Ho et al. (1997) suggest that multiple signals may act as complement. Thus, the present study test how above multiple signals interact. Because of discretionary accruals and earnings forecast are both components of accounting reporting, therefore, I expect that these two signals will act as complement relationship.
The empirical results evidence that discretionary accruals, earnings forecast, and ownership retention are all credible (value-relevant) signals for initial public offerings firms’ signal their values. It is also found that there is a complement effect association between discretionary accruals and earnings forecast. The hypotheses gain confirmatory supports in the present study.
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