The Relation between the Changes of Information Transparency Ranking and Earnings Management

• Main Authors: Chen-Hsuan Lin, 林湞瑄
• Other Authors: Min-Jeng Shiue
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/89568945658662908197

碩士 === 國立臺北大學 === 會計學系 === 96 === After 2002, post-Enron period, issues related to corporate governance and information disclosure have been widely discussed. In order to improve the companies’ transparency and encourage companies disclose more information, the Securities and Futures Institute (“SFI”), entrusted by the Taiwan Stock Exchange Corporation (“TSEC”) and the Gre Tai Securities Market (“GTSM”), currently launched “Information Disclosure and Transparence Ranking System”(IDTRS) to evaluate the level of transparency for all public trade companies in Taiwan since 2003. Prior studies suggest that the level of disclosure from IDTRS can’t differentiate earnings management between “more transparent” and “less transparent” companies. However, past studies indicate that a bond rating change can convey new information to the market. Therefore, the purpose of this study is to examine whether firms’ ranking changes from IDTRS are related to earnings management. As expected, we find that disclosure ranking changes are negative correlative with the proxy of earnings management - discretionary accruals. Especially for the firms with disclosure ranking upgradings tend to engage less in earnings management.