| Summary: | 碩士 === 國立政治大學 === 會計研究所 === 98 === This research from four aspects, business cycle, financial reporting quality, earnings management, and corporate governance, examines that Taiwan stock market reaction to the seventeen events associated with adoption of Fair Value Accounting (FVA).
The empirical results reveal that due to Fair Value Accounting’s procyclical effect, when economic is booming the market tends to positively react with FVA and banking industry displays a higher procyclical effect than other industries. The study also finds that with FVA investors tend to have positive reaction on firms’ pre-adoption information with lower financial quality, higher earnings management possibility and weaker corporate governance. The findings suggest that the FVA adaption increased the quality of financial reporting, reduced earning management and decreased information asymmetry. In the meantime, the FVA links financial reporting with business cycle which might aggravate the financial reporting’s fluctuation.
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