| Summary: | 碩士 === 中國文化大學 === 會計學系 === 99 === This study aims to investigate whether material financial scandals can pose an impact on the behavior of earnings management, and, if any, to further examine whether the material financial scandal affects earnings management behavior via changes in corporate governance. Using the Procomp scandal as the investigated fi-nancial scandal and data surrounding the event from 2002 to 2008, this research de-monstrates that the Procomp scandal event did create a mitigating effect on compa-nies’ earnings management. However, the effect only lasted four years and the beha-vior of earnings management started to pick up in the fifth year after the scandal. Nevertheless, my findings do not indicate that the financial scandal reduced the earnings management behavior through the adjustments of corporate governance; that is, corporate governance did not play a mediating role in mitigating earnings management.
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