A Study of the Restatement of Financial Statements and the Characteristics of Corporate Governance

• Main Authors: Li-Ting Chen, 陳麗婷
• Other Authors: Her-Jiun Sheu
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/91603511823831601620

碩士 === 國立交通大學 === 經營管理研究所 === 93 === The restatement of financial statements will mislead the financial statement users. We first empirically examine the announcement effect of the restatement of financial statements on stockholder’s wealth. We then examine the relationship between the restatement of financial statements and corporate governance mechanisms which are further divided into stockholders’ dimension, Board of directors’ dimension, and CEO’s dimension. We examine a sample of 70 restatements on listed company in the period 1999-2003, together with matched control groups of industry, year and similar size. The empirical results can be summarized as follows: 1. Companies experienced a significantly negative abnormal return when the restatement of financial statements is announced. 2. Stockholders’ dimension: (1) Companies that restated financial statements had significantly lower percentages of institutional stockholders’ holdings than those which did not restate their financial statements. (2) Companies that restated financial statements had significantly lower percentages of outside big stockholders’ holdings than those which did not restate their financial statements. 3. Board of directors’ dimension: (1) Companies that restated financial statements had significantly higher size of board of directors than those which did not restate their financial statements. (2) Companies that restated financial statements had significantly lower percentages of independent directors on the board than those which did not restate their financial statements. 4. CEO’s dimension: (1) Companies that restated financial statements didn’t have significantly higher percentages of CEO’s holding than those which did not restate their financial statements. (2) Companies that restated financial statements didn’t have significantly higher CEO’s compensation than those which did not restate their financial statements.