Study on Corporate Working Capital Management and Earnings Management

Autor: Shou-Ying Wang, 王守瑩
Rok vydání: 2014
Druh dokumentu: 學位論文 ; thesis
Popis: 102
The major difficulties encountered by SMEs with respect to financing are as follow. (1)Limited sources of finance; (2)Higher cost for loans; (3)Failure to qualify for institutional credit; (4)Unfavorable terms and conditions for institutional credit. In many cases they maintain simple accounting systems that make it hard to prepare financial statements or debt repayment plan. Besides, for a variety of reasons, SMEs have often failed to declare properly their revenues for tax purposes. The usage of accounting information contained in financial reports has led some academics to hypothesise that managers use earnings management with the motivations for Capital market, Lending contracts, Regulatory, and Political cost. According to Roman (2009), earnings can be also be managed by timing of transaction. In this study, the purposes are to explore the following aspects: whether working capital will be used as a tool for earnings management? whether firms accelerate earnings prior to lending covenants? whether firms decelerate earnings for tax planning? In this study, the Modified Jones Model was adopted to estimate discretionary accruals (DA). In addition, domestic public offering companies were empirically testing with regression analysis during the study period of 2001-2012. The empirical results show: (1)working capital and net working capital showed a significant negative correlation with the modulus of discretionary accruals items, (2) the short-term borrowing was significant positive related with the modulus of discretionary accruals, (3) the deferred income tax and the modulus of discretionary accruals was significant negative related, and (4) the emerging companies and OTC companies were more likely to have earnings management than listed companies.
Databáze: Networked Digital Library of Theses & Dissertations
Externí odkaz: