The Influence of Board Characteristic on Managers in Preparing Consolidated Financial Statements

• Main Authors: LU,CHIH-YIN, 盧致因
• Other Authors: HSU,SHU-WEI
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/00384680300045541280

碩士 === 東海大學 === 會計學系 === 104 === This study examines how board characteristic affect managers’ incentives in preparing consolidated financial statement. Prior studies investigate the effects from the change in standards regarding consolidated financial statements, or the association between corporate governance and information transparency. In preparing consolidated financial statements under the control concept, managers’ judgments are needed. Thus managers have discretions in deciding whether investments in other companies should be consolidated. This study examines how the attributes of board characteristic affect managers’ discretions in preparing the consolidated financial statements. The sample includes companies from Taiwan Stock and Gretai Securities Market of the year 2014. Poisson regressions are used to examine the association between the number of companies consolidated and the variable of board characteristic. The empirical results show that managers in preparing consolidated financial statements have influences on some variables of board characteristic. If directors own higher percentage of stocks, the number of companies consolidated decreased. Additional test show that when board comprised by higher percentage of outside directors, the percentage of companies consolidated increased. On the other hand if directors own a higher percentage of stocks, the percentage of companies consolidated decreased. The results support the influence of board characteristic on manager’s discretion in preparing consolidated financial statements.