A Study on the Association among Related Party Transaction, Audit Committee and Firm Value

• Main Authors: Chun Chen Hsu, 許淳甄
• Other Authors: Jen Ten Liu
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/nr57k2

碩士 === 國立臺北商業大學 === 會計財稅研究所 === 106 === Recent financial scandals have mostly involved related party transactions, the complexities of which have contributed to investors’ misgivings. An audit committee comprises three or more independently directors with financial expertise who are unaffiliated with the firm under audit. The purpose of an audit committee is to supervise a firm’s management and increase the credibility of the firm’s financial statements. According to signaling theory, a firm establishes an audit committee to reduce information asymmetry and convey truthful information about the firm to investors. In the present study, the Ohlson model was applied to investigate related party transactions among listed companies in Taiwan as well as audit committee influence on firm value. Empirical results indicate that (1) establishment of an audit committee positively affected firm value; (2) related party purchases negatively affected firm value, whereas related party lending transactions positively affected firm value; and (3) both of the interaction of audit committee and related party sales and the interaction of audit committee and related party property transaction significantly were negatively correlated with firm value. Therefore, instituting an audit committee inhibited related party transactions and prevented firm value decline.