• Industry Promotion Research
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• v.8 no.2
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• pp.11-19
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• 2023

The purpose of this study is to analyze the effect of economic uncertainty on business innovation. To this end, Ahir et al. (2018) World Uncertainty Index (WUI) is selected as a proxy for economic uncertainty, while total R&D investment (RD), capitalized R&D investment (RD_A), expensed R&D investment (RD_E), and the proportion of capitalized R&D investment to total R&D investment (RD_R) are selected as variables representing business innovation. The research findings showed that economic uncertainty (WUI) had a statistically significant positive (+) relationship with total research and development investment (RD), asset-based research and development investment (RD_A), and the proportion of asset-based research and development investment (RD_R). This relationship remained the same even after controlling for managerial opportunistic accounting behavior (DACC; discretionary accruals). These findings suggest that companies focus on research and development investment as an opportunity for management innovation even in the face of economic uncertainty. The results of this study are significant in demonstrating the validity and effectiveness of government support for industrial promotion under economic uncertainty.

• Asia-Pacific Journal of Business
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• v.14 no.3
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• pp.167-186
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• 2023

Purpose - The purpose of this study is to empirically investigate whether the auditor accreditation system for IPO firms improves the efficiency of the KOSDAQ IPO market. To verify the effectiveness of the auditor designation system, we time series compare four measures of IPO firms (earnings management, long-term stock performance, change in operating performance, and possibility of delisting). Design/methodology/approach - We test the hypothesis through event research method and regression analysis. Specifically, the dependent variables of the regression model are discretionary accruals in the year of IPO, 36-month holding period excess return after IPO, change in operating performance for 3 years after IPO, and dummy variable for delisting. And the explanatory variable is a dummy variable that separates the period before and after the implementation of the auditor designation system. Findings - We find that earnings management and delisting risks decreased more in the period after the implementation of the auditor accreditation system than in the previous period. In addition, we find that long-term stock performance and operating performance after IPO increase further after the implementation of the auditor accreditation system. Research implications or Originality - Overall, the results of this study suggest that the implementation of the auditor accreditation system for IPO firms contributes to improving market efficiency in the KOSDAQ market, where information asymmetry is high. Our study differs from previous studies in that it demonstrates the effectiveness of the auditor designation system using various measures.

• Management & Information Systems Review
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• v.37 no.4
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• pp.1-20
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• 2018

This study aimed to examine earnings quality of firms selected as Global Champs project which has been promoted by the government since 2013 to support small and medium sized enterprises, for the screening year(t-1) and selected year(t). Earing quality is measured as the value of discretionary accruals estimated by Dechow et al.(1995) adjusted Jones model and Kothari et al.(2005) model, respectively. I analyze the differences of earning quality between the Global Champ firms and the paired firms selected through criteria of the similar total assets and the same industry in the screening year and the selected year. This study is motivated by the needs of measurement of the performance of the Project from the accounting transparent point of view. As the results of this study, major findings are summarized as follows. Firstly the earnings quality of the selected firms was lower than that of the paired firms. This can be explained as a result of motivation of earnings management by companies eager to meet the requirements to be selected for the Project. Secondly, in the selected year, the earnings quality was proved to improve, comparing to the screening year. This can be explained by the efforts of companies to reinforce management innovation and transparent management, which in turn led to positive effects on the earnings quality. These findings were found to be consistent in the additional analyses, where the earning quality of the reconstructed sample with only selected companies was compared for the screening year and the selected year, based on the year before the screening year(t-2).

• Management & Information Systems Review
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• v.31 no.1
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• pp.221-246
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• 2012

The study examines the effects that non-audit service and firm's ownership structure might have on the value relevance directly or indirectly. This investigation is based on prior research which suggests that the audit firms' non-audit services is likely to adversely affect investors' perceptions of the credibility of financial reporting and that corporate governance are likely to mitigate the adverse this kind of non-audit services effects. The sample consists of non-banking firms listed on the Korea Exchange that reported annual financial statements over the period from 2004 to 2008. In the setting, stock returns as proxy for capital market response, auditor quality(measured as the discretionary accruals) is endogenously determined. This study employs a structural equation model to take into account the endogenous variables under study. The analysis influences through the path analysis that ownership structure suppress the market response through audit quality and also the non-audit service have influence on the market response through audit quality. The results of this study contribute to the literature in the following ways. First, this provides direct evidence that there is a negative association between audit firms' client importance and the value relevance. Second, the findings that the negative association is attenuated for audit quality support the findings of prior studies which present that corporate governance provide higher credibility of financial reports.

• The Journal of the Korea Contents Association
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• v.12 no.9
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• pp.280-292
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• 2012

In general, a venture capital invests in tech startups and helps them improve the corporate transparency through board of directors. With respect to venture capital investment and its impact on the corporate transparency of the newly public firms from 2004 to 2010 in Korea, we have made regression analysis. First, it was found that it was likely to be less transparent, the larger its asset size or the higher its debt ratio was. Second, lower level of ownership-control disparity resulted in higher transparency. Third, a shorter period to IPO and higher growth rate were more prominent in companies with lower degree of transparency. The above findings were not conclusive to prove whether or not venture capital directly increases the transparency level of its portfolio companies, but do insinuate the possibility of a negative impact on the transparency of its investee companies, as early IPO's were associated with less transparency. This is all the more persuasive as it was observed that companies with a lower level of transparency had generally raised more money from venture capitals, and that companies with a higher growth rate and/or higher PBR, have shown to be less transparent.

• The Journal of the Korea Contents Association
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• v.19 no.12
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• pp.68-83
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• 2019

The characteristics of intermediate-level waste treatment services are likely to have a negative effect because they act as a factor in promoting incentives of earnings management in the relationship between financial characteristics and earnings management in companies which are possible for earnings management. The researchers conducting this study attempted to empirically verify relationships between financial characteristics and earnings management against domestic construction waste disposal companies in consideration of the characteristics of intermediate-level waste disposal businesses, and the results are as follows. As construction waste disposal businesses grew larger, and the trade receivables collection period lengthened, the intention to increase profits via real activities strengthened. As the ability to generate cash via sales activities weakened, and the difference between the EBITDA margin and the operating margin was lower than the difference in industrial average ratio, discretionary accruals and earnings management via real activities were greater. In particular, there were differences in the variables of intermediate treatment business characteristics which reveal moderating effects by financial characteristics. This study is meaningful in that the scope of relationships between financial characteristics and earnings management in accounting is expanded to cover the construction waste disposal industry.