Earnings Management Behavior of State-owned Enterprises

• Main Authors: Huang,Shu-Wen, 黃淑雯
• Other Authors: HUANG,CHUNG HUEY
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/78199747021675127307

碩士 === 國立臺北大學 === 會計學系 === 94 === The study is to investigate the relationship between the earnings management behavior of state-owned enterprises and the deletion of former audit compliance requirement that applied to stated-owned enterprises whose actual net income are reached 20% below or above the legal budget earnings. This study examines the earnings management data of the state-owned enterprises from 1998 to 2005 and focuses on the test results of “Total Accruals” and “Discretionary Accruals” by using the “Modified Jones Model” proposed by Dechow, Sloan and Sweeney in 1995. The results show as follows:  Total Accruals 1. Based on the total samples selected, the result shows that the managers of stated-owned enterprises tend to adopt discretionary accruals to increase reported earnings. Further, under the 20% legal compliance requirement setting, the result also shows the managers of government enterprises tend to adopt discretionary accruals to decrease reported earnings when earnings before discretionary accruals are above 110% of the legal budgets. 2. Under the deletion of the 20% legal compliance requirement setting and among the total sample selected, the results again shows the stated-owned enterprises tend to adopt discretionary accruals to adjust reported earnings before and after deletion of the 20% legal budgets earnings.  Discretionary Accruals The results show that when the earnings before discretionary accruals are above 110% of legal budgets the managers of state-owned enterprises tend to adopt discretionary accruals by using ‘accounts receivable’ and ‘accounts payable’ accounts to adjust reported earnings.  Additional Tests The selected samples are divided into groups being audited and non-audited and the results show that the earning management behavior has been discouraged when state-owned enterprise accounts had been audited. Moreover, there is no significant evidence discovered when samples were divided into groups of under audited and non-audited requirements and whose net earnings had reached the required percentage of legal reserve. Likewise, the evidence is weak even when samples are grouped according to industry, shareholding percentages.