| Summary: | 碩士 === 國立東華大學 === 會計與財務碩士學位學程 === 99 === This paper examines the relationship between the level of pre-SEO deferred tax asset valuation allowance and the firms’ characteristic through 2000 to 2009 form listed company in Taiwan, how investor’s reaction in SEO announce and the post-SEO long-term performance. We find that the better growth companies don’t change the deferred tax asset valuation allowance before seasoned equity offerings, the larger companies who tend to reduce deferred tax asset valuation allowance. Investors have a significant negative response for discretionary accruals, and no have significant response for the level of deferred tax asset valuation allowance. Besides, before seasoned equity offerings the firms that reduce deferred tax asset valuation allowance have worse long-term performance. Therefore, the firms reduce deferred tax asset valuation allowance to earnings management just for SEO easier, the firm that didn’t change deferred tax asset valuation allowance have batter long-term performance.
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