| Summary: | 碩士 === 朝陽科技大學 === 會計所 === 95 === Lev et al. (2005) document that companies with a high R&D growth rate relative to their profitability report conservatively, while firms with a low R&D growth rate tend to report aggressively under GAAP procedure. Such an theory about R&D reporting biases is based on the assumption that R&D growth rate is fixed, which however is not realistic in practice. Besides, the market may appear undervaluation from conservatively reporting or overvaluation from aggressively reporting if investors fixate on reported profitability. In this study, we adopt the listed firms (TAIEX) that need to report R&D expenditures during the period 2000 to 2005 to show empirically that the theory about R&D reporting biases is still applicable in practice, and to detect any misvaluation from R&D reporting biases.
The empirical results indicate that the theory about R&D reporting biases is significantly applicable for the listed firms in Taiwan. Furthermore, companies with financial report reverting from conservatively (aggressively) to aggressively (conservatively) significantly appear positive (negative) abnormal return.
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