Transfer Pricing and the Value-relevance of Financial Statement

• Main Authors: Chien,Yihung, 簡溢宏
• Other Authors: Fan,Hungshu
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/50651974499891881633

碩士 === 輔仁大學 === 會計學系碩士班 === 99 === This study is to focus on examining the relation between Transfer Pricing and value-relevance of Financial Statement. Because the rapid development of global economy and the specialization in industrial structure made enterprise to become multinational enterprises, multinational enterprises have tried to utilize the internal resources optimally within the affiliated group and to achieve their overall profit maximization, and they usually have taken the transfer pricing policy to determine the prices for transactions between related parties. In order to test the effect of listed firms’ transfer pricing manipulation on the value-relevance of financial statement, this study followed Chen and Tsai (2010) transfer pricing regression models to proxy transfer pricing manipulation ant test the relationship between transfer pricing and discretionary accruals. Furthermore, this study adopts the Ohlson (1995) model to examine the impact of transferpricing manipulation on the value relevance of financial statement. The empirical results indicate that the relation between transfer pricing manipulation and discretional accrual is significantly positive. It means that listed firms engage in earnings management through transfer pricing transaction within the affiliated group. Furthermore, this study finds that transfer pricing transaction manipulation influence the the value relevance of earnings and book value, which means when listed firms engage in earnings management through transfer pricing manipulation behaviors, it could reduce investors’ reliance less onearnings information, and more on book value in their investment decision.