The Effect of Insider Trading on Value Relevance of Asset Write-Downs
碩士 === 東海大學 === 會計學系 === 101 === This study investigates the effect of insider trading on value relevance of assets write-downs (asset impairment). Managers play a critical role in the treatment of impairment of assets, involving discretions and judgments. The process is undisclosed and unknown to o...
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| Format: | Others |
| Language: | zh-TW |
| Published: |
2013
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| Online Access: | http://ndltd.ncl.edu.tw/handle/09228859461098675242 |
| Summary: | 碩士 === 東海大學 === 會計學系 === 101 === This study investigates the effect of insider trading on value relevance of assets write-downs (asset impairment). Managers play a critical role in the treatment of impairment of assets, involving discretions and judgments. The process is undisclosed and unknown to outsiders. Prior researches suggest that insider trading reflects insiders’ private information on future prospects of firms. If insider trading reflects private information of managers, insider trading could convey information about the value relevance of asset write-downs.
This study uses the samples occuring impairment of assets and insider trading in the same year. The sample covers firms listed on TSE and OTC from 2004 to 2012. Price model and return model are used to investigate whether insider trading affects the value relevance of asset write-down.
The results shows that insider trading affect value relevance of asset write-downs. In addition, the effect of insider net buying is greater than insider net selling. The results also hold if the sample is limited to electric industry. In sum, the results support that insider trading conveys information to enhance the value relevance of asset write-downs.
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