| Summary: | 碩士 === 長庚大學 === 工商管理學系 === 102 === Using data on public traded Taiwan companies from 2003 to 2012,
this study investigates the effect of CEO overconfidence on accruals (AEM)
and real earnings management (REM).Overconfidence measures are
following Malmandier and Tate(2005) modified model and Campbell, et
al.(2011)&;Ahmed, et al.(2013) modified model, Earnings measures are
following DeFond and Jiambalvo (1994) model and Roychowdhury (2006)
model. The purpose is examine the impact of CEO overconfidence on AEM
and REM choices.
The empirical results show that there has a significant results between
the overconfidence proxies and REM proxies. This suggests that
overconfident managers are less likely to engage in AEM compared to the
other managers. As they are more concerned about damaging their
reputation, and AEM is more likely to be detected and is prone to outside
scrutiny. Some research also show that REM is prior to AEM, and AEM
does not affect operating activities but REM does, which affects firm’s
future performance significantly, Roychowdhury(2004) finds that cash
flows can be affected through real activities operations from operating
activities.
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