| Summary: | 碩士 === 東海大學 === 會計學系 === 104 === This study investigates how effects of changes in accounting standards affects managers incentives on preparing the consolidated financial statements. Changes are divided into two parts: The first part is the amendment of Statement of Financial Accounting Standards (SFAS) No.7, making the scope of the consolidated subsidiaries has been expanded. And the second part is to adopt International Accounting Standards (IAS) overall in 2013. According to the accounting standards, whether an investment in other company should be consolidated into the parent company’s financial is based on the concept of control, which provides discretions for managers. This paper use the proportion of companies consolidated as managers’ discretion, to discuss the impact between accounting standards and discretions of managers in preparing the consolidated financial statements.
The research sample includes companies listed on the Taiwan Stock and Gretai Securities Market from around the change of accounting standards in 2005 and 2013. This research focus on comparing the proportion of companies consolidated before and after changes in accounting standards. Specifically, this paper regress the proportion of companies consolidated on the dummy variables of SFAS No.7 revision, dummy variables of IAS adopting and control variables.
The result shows that after the amendment of SFAS No.7, the proportion of companies consolidated increased, indicating that managers’ incentives to avoid consolidating investments in other companies decreased. However, the result do not show that the adopt of IAS overall affect mangers’ incentive in preparing consolidated financing statements.
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