Reexamining the Relationship between the Use of Financial Instruments under SFAS No.34 and Earnings Management Decisions

• Main Authors: Hsieh, Tzu-Hsiang, 謝字翔
• Other Authors: Ph.D Fan, Hung-Shu
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/89516233859066172299

碩士 === 輔仁大學 === 會計學系碩士班 === 97 === The purpose of this study is to use larger sample consisting of 1834 listed companies in 2006 & 2007 to reexamine the relationship between the use of financial instruments under SFAS No.34 and earnings management decisions.. This study adopts Kothari et al. (2005) method to compute discretionary accruals which proxy the managers’ earnings manipulations behaviors. And this research focuses on myopic opportunistic earnings management behavior and expands the scope of financial instruments to examine the relation between the use of financial instruments under SFAS No.34 and earnings management decisions. The empirical results are summarized as follows: 1. The use of financial instruments under SFAS No.34 is not aimed at income smoothing. It is aimed at myopic opportunistic earnings management. 2. There is a significant positive relation between the absolute discretionary accruals and the use of financial instruments under SFAS No.34. Combing these evidences, this study concludes that the sample firms have tended to manage earnings opportunistically and use both the discretionary accruals and financial instruments under SFAS No.34 to achieve their earnings management purpose.