| Summary: | 碩士 === 國立臺灣大學 === 會計學研究所 === 95 === The Legislative Yuan passed the amendment of Business Accounting Act on April 28, 2006. There after, FSC announced the related accounting rules for expensing employee bonus on March 30, 2007. With such revision, the employee bonus will be recognized as an expense rather than earning distribution, and will be measured by fair value after January 1, 2008.
This study examines the impact on stock prices of six pronouncements related to expensing employee bonus events. Compared to no employee bonus firms, the higher employee bonus firms exhibits significant positive abnormal returns around the event 2 and significant negative abnormal returns around the event 5.
The negative abnormal returns related to expensing employee bonus events are most pronounced for firms with higher employee bonus, firms with higher future growth opportunities, and firms with lower free cash flow. These results are consistent with the employee bonus hypotheses, future growth opportunities hypotheses, and free cash flow hypotheses. This study also finds out that the abnormal returns are more pronounced for Electronics industry.
|
|---|
