| Summary: | 碩士 === 雲林科技大學 === 企業管理系碩士班 === 96 === There is information asymmetry between the corporate authority and the outside user of the financial statement. Manager would manipulate the earning to prevent the stock price to drop or the salary is deleted.
We use Taiwan Listed companies as subjects and the research period is from 2002 to 2006. This study aim is to exam the relationships between corporate governance and earning management, and the relationships between institutional investors and earning management, especially by threshold mentality. Final empirical evidences show that (1) No matter the manager is engaged in income-increasing or income-decreasing accruals management, the ownership of institutional investors is positively related to the earning management significantly by the loss-making firm. (2) The corporate governance index while companies already reaching the threshold, can prevent the administrative authority doing the earning management. When companies have not reached the threshold, the corporate governance index is unable to supervise effectively. (3) The corporate governance index and the ownership of institutional investors can keep the original relationship of earning management under considering both.
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