The Relationship between Firm's Management Objective and Indirect Earnings Management

• Main Authors: TZU CHI LIN, 林子琦
• Other Authors: William W. Sheng
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/63671577907809621425

碩士 === 東海大學 === 會計學系 === 93 === When a firm announces its annual earning information, large number of financial statement information often causes the public to have difficult judgment of what kind of management objectives are selected by the firm. In original discovery, from observing reminiscent movements in a firm’s financial statement disclosure, we can know the management objective that adapted of enterprises clearly. Thus, this research claims that these reminds movements are indirect earnings management. This research is divided into four major research topics, and these research results of the tests are consistent with our hypothesis. Firstly, our findings indicate that a firm’s management objective not only has pure maximizing earnings or pure smoothing earnings, but also attains the dual objectives simultaneously. Secondly, a firm’s management objective would be changed in the different periods which means that the firm will adjust their management objectives flexibly. Thirdly, different objectives have different characteristics of a firm, like growing stage, electronics industries, greater earnings volatility and greater firm size, would tend to take smoothing earnings objective. Finally, indirection earnings management has a positive correlation with direction earnings management. Therefore, the relationship implies that if a firm has indirect earnings management, turning upward direct earnings management would lead to the firm’s reminding of gain, and vice versa.