The Impact of Audit Committee on the Earnings Management of SEO firms

• Main Authors: YI-TING LI, 李宜庭
• Other Authors: Hsien-Li Lee
• Format: Others
• Language: zh-TW
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/xhp244

碩士 === 中原大學 === 會計研究所 === 103 === Due to the frequent domestic and foreign enterprise scandals, Taiwan implemented Securities and Exchange Act about audit committee in 2007. They hoped to make corporate governance more robust and strengthen supervise function of the Board of Directors to improve the quality of financial statements, and thus protect the stakeholders. The seasoned equity offering is one of the main ways to raise funds in Taiwanese companies. In the past research finding SEO firms tended to engage in earnings management to make their financial statements look better. According to agency theory, the Board of Directors can supervise management. The audit committee can also play the role of supervising the quality of financial statements and can reduce information asymmetry and the agency problem. Thereby reducing the motivation of earnings management. Because the companies engaged in earnings management in the previous of SEO, in this study, we used listed companies from 2008 to 2013 in Taiwan as our sample. To examine the impact of earnings management after SEO firms setting audit committee. The kinds of earnings management include discretionary accruals, real earning management and classification shifting. The empirical results indicate that SEO firms set audit committee can only reduce earnings management of classification shifting.