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• Main Authors: Chi-yuan Chang, 張祺沅
• Other Authors: Hsin-han Shen
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/47317106604703785034

碩士 === 國立中央大學 === 財務金融學系 === 102 === In this study we examine how the earnings management behavior of Taiwanese companies is related to investor sentiment. We posit that managers who care much about stock prices may be more likely to manage earnings when sentiment is high. We first document that investors indeed react more negatively to disappointing earnings when sentiment is higher. We then show that there is a positive association between investor sentiment and discretionary accrual, indicating firms engage in earnings management behavior in order to avoid reporting disappointing earnings. Using corporate governance variables to estimate the agency cost associated with a firm, we find the association between earnings management and sentiment is higher for the firms of which CEO is also chairman and for the firms with lower board independence. Therefore, corporate governance mechanisms are effective in reducing opportunistic earnings management in the face of high sentiment.