| Summary: | 碩士 === 國立成功大學 === 財務金融研究所碩士在職專班 === 102 === Due to the coming of global economic liberalization, reducing of cross-border financing barriers and making a consistent accounting standards, countries around the world gradually adopt IFRSs directly or make their own GAAP in accordance with IFRSs to facilitate cross-border comparability, increase transparency of financial statements, decrease costs of information, reduce information asymmetry and thereby enhance the competition and efficiency of capital markets. There are two debates on whether the adoption of IFRSs could enhance accounting quality, reduce earnings management and over-investment. Prior research finds that over-investment in PPE is lower following IFRSs adoption among EU firms which used to adopt historical cost accounting with impairment testing (Local GAAP) before IFRSs adoption, consistent with that EU firms have more timely loss recognition for PPE under IFRSs strict impairment rules. However, other research finds that German high-tech firms that transitioned to IFRSs from US GAAP in 2005 (called switching firms) generally show more earnings management, less timely loss recognition, and less value relevance compared to those under US GAAP. To solve the debate, this study investigates how the IFRSs adoption affects the investment decision of managements. By using the listed companies in Taiwan which formally adopted IFRSs in 2013, I find that after the adoption of IFRSs, over-investment in capital expenditures is significantly higher, especially in the electronic industry with multiple linear regression analysis. In contrast, the over-investment is less severe in chemical industry. The results indicate that the adoption of IFRSs doesn’t reach the expected benefits in reducing over-investment for most listed companies.
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