| Summary: | 碩士 === 國立臺北大學 === 企業管理學系 === 106 === Recently, there has been lots of financial fraud cases that have impacted on major capital market. The reason why these cases happened is that many financial malfeasances may be related to improper earnings manipulation.
Starting from the ownership structure, the past research proposed two hypotheses. They are separately “convergence of interest hypothesis” and “entrenchment hypothesis”. They were used to verify the relationship between the ratio of insider and firms’ earnings management behavior respectively. The convergence of interest hypothesis suggests that the insiders tend to truthfully reflect the corporate values rather than earnings management, because their interests are consistent with the firms’. Another, the entrenchment hypothesis suggests that the insiders are motivated by the pressures of market competition or mergers and acquisitions to manipulate the stock price by earnings management. Besides, researches confirmed that institutional investors can effectively supervise the firms’ decisions and reduce their incentives to conduct the behavior of earnings management.
Based on the board characteristics, the past studies have pointed out that independent directors would be the role of supervisors, and they can supervise firm’s decision, such as reducing earnings management. In addition, this study argues that firms will conduct earnings management through marketing activities. Therefore, we would like to know the impact of firms’ ownership structure, board characteristics and marketing activities on earnings management.
The study used accruals as the basis measurement of earnings management to be dependent variable, taking ownership structure, board characteristics and marketing activities as independent variables, and taking OTC market’s data to be our sample. In order to use the comparable data based on the same accounting principle, the study takes the data from 2014 to 2016, because Taiwan change accounting principle to IFRS in 2013.
The research got the consequence that the firm’s earnings management will be affected by the firm’s directors’ shareholding ratio, the proportion of independence directors to executive directors and marketing activities. The results of this study can be provided as a reference for government supervising and investors in decision-making.
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