| Summary: | 碩士 === 輔仁大學 === 會計學系碩士班 === 96 === Recently, debate is arisen regarding the quality of different accounting standards all over the world. The empirical research comprises 947 observations of companies which have both the A-share and B-share listed on the stock exchange market of Shanghai or Shenzhen during 1998 to 2006. The aim of this research is to investigate the relationship between accounting standards and earning management so that inference could be made about the quality of IFRS is higher than others and the necessity of adopting IFRS in full-scale. In addition, by comparing the difference of accounting standards, governments and market are allowed to make adjustments to the methods utilized to mitigate the level of earning management.
1.Governments in China turn to adopt International Financial Reporting Standards (IFRS) for their financial reporting. However, the results find that the adoption of IAS does not contribute to significant improvement for the earning management. This might suggest that the flexibility provided by IAS allows firms to adopt the most fitted method for transactions according to the individuality of their countries. Moreover, IAS creates more opportunities for countries to harmonize the deviations of their structure and systems from those of the others. Because of higher ratios of public utilities and state-owned business, the monitoring mechanisms and control is relatively weaker.
2.Audited by the bigger 4 auditing firms, enterprises using IFRS, however, are not found to have lowered the level of earning management, meaning that auditing by Big 4 does not have significant influence on firms’ earning management.
3.Under IFRS, enterprises in Mainland China with different capital structures are not observed having deviations from each other in terms of the level of earning management.
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