| Summary: | 碩士 === 朝陽科技大學 === 會計所 === 99 === The loan loss provision against a bank''s total loans simultaneously appears at the balance sheet and profit and loss statement, in other words, banks need to boost their reserves, which could diminish earnings and increase asset. Therefore, loan loss provision can be used as a tool of bank earnings management. This study examines if Taiwanese banks applies this approach, and further explores how board structure influences Taiwanese banks ‘earnings management. With the data of 1996-2009, it is found that bank would increase the loan loss provision, loan loss reserve and loan charge-off for managing a stable increasing earnings. The empirical results also show that independent directors have not engaged in earnings management, the higher power of bank managers leads to the more earnings management. In addition, it is also found that the banks with higher debt ratio, although loan loss provision is higher, have the higher volatile earning.
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