| Summary: | 碩士 === 輔仁大學 === 會計學系碩士班 === 104 === Most literature focused on the correlation between the amounts of fair values of financial assets/liabilities in different fair value level and stock price. However, this study distinguishes from past studies by focusing on the relationship between the valuation adjustments of the fair value in the third level and earnings management. More specifically, this study investigates whether listed companies would use the valuation adjustments of the financial assets/liabilities which are marked-to-market by the third level fair value as a tool of earnings management. The empiricalresults show that when earnings are close to zero,managers tend to use the valuation adjustments of the fair value in the third level of the financial assets not held for trading to carry out earnings management. In addition, the adjustments of the fair values in the third level of the financial liabilities held for trading also exhibit significant relationship with discretionary accruals. This finding suggests that the adjustments of the fair values in the third level of the financial liabilities held for trading are also generally used as a tool to manage earnings. This study also conducted a number of sensitivity analysis on the above result, and proved that the experiment conclusion is highly credible.
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