A study for material precision decision model--from investor viewpoin

• Main Authors: Su, Shih-Chung, 蘇世忠
• Other Authors: Tsai, Hsin-Fu
• Format: Others
• Language: zh-TW
• Published: 2001
• Online Access: http://ndltd.ncl.edu.tw/handle/13998926438206571166

碩士 === 淡江大學 === 會計學系 === 89 === In the past, material precision decision model research was established by some scholars, majority of them reviewed the influenced factors to the model, and collected and analysis their data from public accountants, auditors, professors, managers and/or students by questionnaire. They do some efforts on material precision decision model, and most of them concluded net income factor is the most critical factor to the model. A certain percentage of net income was accepted to be material precision by most the public accountants. This thesis firstly apply investing decision model of investing theory into material precision decision model of auditing theory. We collect the listed companies’ financial information, and test it by regression, t-test of mean, analysis of variance c2 test and Kruskal-Wallis one factor ranging analysis of variance. This study defined all the 424 listed companies from 1986 to 1999 as population except the banking corporation. In spite of 160 of them operated not over the period and 6 of them information contains errors, all valid samples are 258. We collected each samples’ earning per share, net income, and identification number etc. from Taiwan New Report Database. The major findings and suggestion of this study are: 1.Using predicted returns difference between different risk levels from investors’ viewpoint are reasonable to be the material precision. High level of returns always accompany high level of risk, is an unchanged principal in Financing. It is the rule of this thesis. 2.The net income factor was the most critical one in the past studies, and a certain percentage of net income was set to material precision model for long time. Because we did not know how many percentage of net income should be set to material or immaterial. In the practice, they always consider it depends on Certified Public Accountants’ professional judgments. This study concludes using a certain percentage of net income may possible cause “Audit Risk Anomaly”(The auditor access to lower the auditor risk, but actually auditor risk was higher, such as when the true income are 100, if we use 10% of net income as material precision decision model, when overstated the net income to 150, then we will choose 15, 10% of 150, as material precision. This overstatement and setting a higher material precision, both cause audit risk creasing). 3.This study enforces the users positions on the financial statements. In the past, the material precision decision models are treated to be the professional judgment of Certified Public Accountants. It is not complied with the nature of material precision for the original purpose. Material precision should depend on the users of information, not the offers of information, such as Certificate Public Accountants. In order to preventing information asymmetric risk, the material precision decision models should be declared as the accounting policy, attached to financial statement, and the Certified Public Accountant also have the duties to examine whether this accounting policy was performed. 4.This study found the material precision of investors are about 2.8% to 7% of investment, when the investors’ can only classify the risk levels as high, medium, and low three levels. This conclusion was higher than the other studies. This higher material precision can prevent the auditor’s responsibility by neglect. But if the misstatement over this higher material precision decision models maybe some faults he had.