The Effect of Debt Monitoring on Value Relevance of Accounting Information

• Main Authors: Huei-ru Chen, 陳慧如
• Other Authors: Chu-Yang Chien
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/92338076809100085133

碩士 === 國立雲林科技大學 === 會計系研究所 === 100 === Generally speaking, investors always make decisions by financial statements which are offered by enterprises. But while a series of enterprises engaged in earnings management that makes financial reporting can not reflect the real operating situation. Therefore, we can prevent the fraud happened by a complete corporate governance mechanisms. However, this issue of the corporate governance mechanisms, previous studies are mostly emphasis on the ownership structure or the monitoring of the directors and supervisors, but little has done on the issue of debt monitoring mechanisms. So, the purpose of this study want to examine the effect of debt monitoring and the earnings management behavior on the relative value-relevance of earnings and book value by public companies from 2005 to 2010. Value-relevance is measured by a regression of stock price on earning and book values which is based on Ohlson’s accounting-based valuation model. The empirical results show that in the circumstances of the high debt monitoring and the degree of earnings management is weak, it has a positive effects on the value-relevance of earning, but has a negative effects on the value-relevance of equity book values. Conversely, in the circumstances of the less debt monitoring and the degree of earnings management is strong, it has a negative effects on the value-relevance of earning, but has a positive effects on the value-relevance of equity book values.