| Summary: | 碩士 === 輔仁大學 === 會計學系碩士班 === 97 === The purposes of this study are to examine（1）the relation between environmental disclosures according to『Guidelines Governing the Preparation of Financial Reports by Securities Issuers』 and earning management of firms.（2）the relation between the current total amount of loss (including compensation) and penalty for environmental pollution and earning management of firms in last and this years.
The samples of the study are 3259 firm-years, which are selected from thirteen potential pollution industries having shares listed on the Taiwan Stock Exchange from 2000 to 2006. This study adopts performance-control Jones model, proposed by Kothari et al.(2005), to compute discretionary accruals and uses this measure to proxy the earning management behavior of firms.
The empirical results of this study show as follows：
Firstly, the evidence proves that the absolute discretionary accruals are significantly negative-related with environmental disclosure of firms. It shows that the environmental protection plan established by listed firms will help them to reduce pollution and to decrease penalty for environmental pollution. These firms also have fewer motives to manage their earnings.
Secondly, this study finds that the current total amount of loss (including compensation) and penalty for environmental pollution of firms in last and this years has significant negative relation with the absolute discretionary accruals of firms. It appears that these companies reduce their earnings management behaviors in this sensitive period.
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