The Relationship between Investment Opportunity Set and Earnings Management: The Moderating Effect of Family Ownership

• Main Authors: Huang, Pei-Yun, 黃珮芸
• Other Authors: Chen, Hsiang-Lan
• Format: Others
• Language: zh-TW
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/428494

碩士 === 國立高雄第一科技大學 === 財務管理系碩士班 === 105 === With the growth of the economy and the innovation of industrial technology, companies have more investment opportunities and expect to expand in the competitive market. During the growth of companies, one of the investors’ most concerned issues is the earning management status of the companies. Because Taiwan's companies are mostly family-controlled firms, they have many corporate governance problems. The credibility of financial statements of companies is therefore of utmost importance. We used 3,667 samples of listed technology corporate from 2011-2015, and employed a hierarchical regression analysis. We want to explore whether more investment opportunities for companies result in more earnings management behaviors. We also added the family holdings as interference effects to determine whether companies with high family holdings ratio have higher frequencies of earning management behavior. Empirical results show that companies with more investment opportunities will engage more in earnings management. Also, under uncertain environment the internal control mechanisms of firms with high family ownership ratio can’t keep up with the current situation of the company. This will in turn result in strengthened earnings management, but lower quality of financial statements. Therefore, high ratios of family ownership of firms have a significant positive impact on investment opportunities and earnings management.