| Summary: | 碩士 === 東吳大學 === 會計學系 === 106 === In recent years, the system of Independent Directors and Audit Committee were introduced into Taiwan, hoping that the formal meetings of Audit Committee as well as the specialties of Committee members could help to strengthen the quality of Taiwanese companies’ financial reports. To understand the relationship between audit committee and the hedging derivative trading, there are three major topics in our research. First, when facing the heavy volatility in exchange rates, whether Audit Committee would increase the use of hedging derivative trading to lower down the impact on profit? Besides, whether the percentages of board members with financial literacy play a crucial role in this topic? Last but not least, of those companies that were more heavily impacted by exchange rates volatility, whether Audit Committee would help to reduce the amount of discretionary accruals?
To study the three major topics mentioned earlier, this study collects 3201 observations of listed Taiwanese companies in the electronics industry from 2013 to 2016. The results indicate that the companies with Audit Committee are more reluctant to use derivative trading for hedging. However, among the companies that use hedging derivative trading, companies with Audit Committee tend to execute more hedging derivatives trading. By further examining, this study discovers that the existence of Audit Committee in companies does not have linear relationship with the adoption of hedging derivative trading. Furthermore, also find that the percentages of board members with financial literacy do not have linear relationship with the adoption of hedging derivative trading. Finally, among the companies that encounters greater profit or loss due to changing exchange rates, the installment of Audit Committee does not have linear relationship with the amount of discretionary accruals.
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