| Summary: | 碩士 === 國立雲林科技大學 === 會計系 === 103 === Prior studies reveal the agency problem between controlling shareholders and minority shareholders is more critically in Taiwan. This study uses control-deviation of controlling shareholders, which is measured as the differential between controlling shareholders’ board seats and cash flow rights, to measure the agency problem, in turn, examines the association between a firm’s agency problem and accounting conservatism. This study conjectures that high control-deviation of controlling shareholders will result more accounting conservatism. This study follows Basu’s (1997) model and describes conservatism as resulting in earnings reflecting ‘bad news’ more quickly than ‘good news’, in turn, examining the association between controlling shareholders’ control deviation and accounting conservatism of listed firms in Taiwan. The empirical results reveal that the divergence between controlling shareholder’s control-deviation is positively associated with accounting conservatism and support the hypothesis. This study implements several diagnostic checks and documents the empirical results are robust to various specifications.
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