Earnings management of the cross-listed firms

• Main Authors: Chen,Ko-Yuan, 陳克源
• Other Authors: Chan, Min-Lee
• Format: Others
• Language: en_US
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/99934715422922679396

碩士 === 靜宜大學 === 財務金融學系 === 99 === The extent of firm’s earnings management is affected by the environments of investor protection. The United States has been considered as an economic community with better investor protection system than those of other countries, especially after the Sarbanes-Oxley Act (SOX) at 2002. The Sarbanes-Oxley Act (SOX) mandated strict reforms to improve function of corporate governance for US listed firms and those cross-listed foreign firms (ADR). This research was commenced with interest in the impacts of corporate governance on the earnings management at Taiwan and Hong Kong cross-listed firms in the US, and whether this impact has any change after SOX. The main proxies for corporate governance in this study include the proportion of independent directors in the board, CEO duality, the independence of audit committee and financial experts in the audit committee. In sum, this study provides evidences that whether CEO serves as the president of the board concurrently does significantly affect the earnings management after SOX; it has negative impact on earnings management in ADR firms while the positive impact exists in non-ADR firms. The influence of SOX in earnings management depends upon the ADR issuing countries, that is, the SOX has a greater effect on Taiwan ADR since the effect of CEO duality on earnings management presents the significantly negative results in Taiwan ADR, but not true for Hong Kong ADR. However, the SOX has a greater effect on Hong Kong non-ADR since after SOX, CEO duality has a significantly positive effect on earnings management of Hong Kong non-ADR firms.