| Summary: | 碩士 === 國防管理學院 === 國防財務資源研究所 === 94 === ABSTRACT
This research aims to investigate manager’s behavior of applying discretional accruals and financial derivatives to manage Earnings, while the three hypotheses of Positive Accounting Theory are held. This research chose "zero", "reported earnings(RE) "and "analysts’ expectations positive and negative 20%(AE±20%) "to be our thresholds. We found that while the bonus plan hypothesis and debt covenant hypothesis are held, and the business earnings before manipulation belong to following three situations: above zero, above RE and above AE±20%, managers tend to use discretional accruals to smooth earnings. While the political cost hypothesis is held, and the business earnings before manipulation belong to following situations: below zero, below RE and below AE±20%, managers prefer using financial derivatives to advance the earnings.
While considering the manipulation of these two devices, managers also take the relationship between their own profits and business achievements into consideration. Our research found that the higher the manager’s percentage of stock holdings the more possibilities for them to apply discretional accruals. Besides, higher debt ratio also makes managers tend to use discretional accruals to control earnings for the sake of higher debt paying ability. Companies with bigger scales and higher degrees of internationalization being sensitive to interest rate and exchange rate prefer to use financial Derivatives for Earnings Management.
Furthermore, the study concluded the following result: there is a substitute relation between discretional accruals and financial derivatives while managers apply them.
Key words: earnings threshold, earnings management, discretional accruals, derivatives.
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