| Summary: | 碩士 === 國立彰化師範大學 === 會計學系 === 99 === Managers can choose different methods to manage the earnings. Current
literature indicates that managers can manage earnings by real earnings
management method or accrual earnings management method. This study
investigates the effect of corporate capital structure - leverage ratio on the
determination of earnings management method. The empirical result indicates
that compared to the corporate with lower leverage ratio, the higher leverage
ratio corporate is more likely to use real earnings management method. The
reason is that the financial statement of corporate with higher leverage ratio is
more likely to bring about the strict supervision of debtors. Thus, corporate is
more likely to replace accruals earnings management method with real earnings
management method. In addition, this study also discusses whether manager is
more likely to adopt real earnings management method when the corporate
leverage ratio increase. However, the results are mixed. The result can
supplement current literature investigating the relationship between leverage
ratio and earnings management.
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