• Journal of Navigation and Port Research
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• v.41 no.4
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• pp.235-242
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• 2017

Earnings management is defined as an intentional act during the financial reporting process or a manager's choice of accounting policies to avoid earnings decreases or obtain some private gains. Shipping firms have a highly debt-intensive capital structure and a significant motivation in earnings management to avoid failure of a Debt Covenant. From this point of views, this paper tries to determine the relationship between the capital structure and discretionary accruals estimated using the re-modified Jones model (1995). The sample used to test the research models is made up of 87 Korean shipping firms during the period from 2007 to 2015. A histogram analysis, t-test and FGLS confirm the possibility of using earnings management, and it proved that Korean shipping firms manage their earnings to avoid financial loss. An analysis of the relationship between the capital structure and earning managements, shows it is difficult to support the Debt Covenant, shown as a negative relationship between the debt ratio and debt maturity as shipping firms' capital structure and discretionary accruals as earning management variable. An additional analysis presents a negative relationship between previous debt maturity and discretionary accruals, and the possibility of earning management in a highly increased debt ration group.

• The Korean Journal of Financial Management
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• v.27 no.1
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• pp.31-62
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• 2010

This paper analyzes empirically how analysts' forecasts affected by ownership structure. This study examine a sample of 1,037~1,629 the analysts' forecasts of firms registered in Korean Stock Exchange in the period from 2000 to 2006. The empirical results are summarized as follows. First, from the analysis, companies which have higher major shareholder's holdings tend to increase earnings forecast errors and earnings forecast accuracy. Meanwhile, companies which have higher institution shareholder's holdings tend to decrease earnings forecast errors and earnings forecast accuracy. This result is in line with the view of previous works that companies with higher major shareholder's holdings look towards more of analysts' optimistic forecasts in order to maintain friendly relations with major shareholders. Because of analysts' private information use from major shareholders, earnings forecast accuracy is higher in high major shareholder's holdings firm than in high institution shareholder's holdings it. Second, this analysis is whether the minimal required selection condition of outside directors, audit committee adoption and audit quality affect the relation between ownership structure and analysts' forecasts. This result is that variables related corporate governance do not affect statically the relation between ownership structure and analysts' forecasts. The meanings of this paper is to suggest the positive relations between ownership structure and analysts' forecasts. After this, if analysts will notice forecasts of more many firms, capital market will be more efficient and this field works are plentiful. Also it will need monitoring systems not to distort market efficiency by analysts' dishonest forecasts.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.40 no.4
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• pp.221-229
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• 2017

In the international businesses human resource elements acquired in different countries might have different values in varied industries due to the different quality of education and experiences in the original countries. Using selection models to evaluate expected values in earnings equation of human resource elements such as education and experiences etc. acquired in sending countries, system equations are expanded to examine also the values of science and engineering degrees in technology jobs with selectivity bias correction. This paper used the US census survey data of 2015 on earnings, academic degrees, occupations etc. The US has long maintained the policy of accepting more STEM workers than any other countries and helped maintaining own technological leadership. Assuming per capita GDP gap between the sending country and the US downgrades immigrant human resource quality, it rarely affects occupational selection but depresses earnings on average by two or more years' worth of education. Immigrant quality index in the sense of GDP gap appears to be a valid tool to assess the expected earnings of the worker with. Engineering degrees increase significantly the probability of selecting not only engineering jobs but also general management jobs, as well as increasing the expected earning additionally over nine years'worth of education. Getting a technology job is additionally worth about four years of education. Economics and business degrees are worth additionally almost six years of education but humanities degrees depress expected earnings. Since years after immigration does not very fast enhance earnings capacity, education level and English language ability might be more useful criteria to expect better future earnings by.

• Journal of Digital Convergence
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• v.19 no.11
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• pp.113-119
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• 2021

This study compared business performance and earnings quality before and after the COVID-19 pandemic for information and communication companies whose sales increased due to the impact of the COVID-19 pandemic. For this, 4 indicators of ROA, growth potential, liquidity, and stability are used for business performance, and for earnings quality, the standard deviation of the residuals measured by the Dechow and Dichev(2002) model and Francis et al.(2005) model was used. As a result of the analysis, ROA, a representative business performance indicator, increased after xthe period compared to the period before the pandemic, but liquidity was rather deteriorated. As for the quality of earnings, it was confirmed that earnings sustainability is maintained in the post-pandemic period compared to the previous period, similar to ROA. Overall, the profit level and earnings quality of information and communications companies seemed to be improving, while liquidity was deteriorating. This confirms that companies that have overcome the immediate crisis are not ready to pay off their debts right away. Therefore, it suggests that companies need restructuring to reduce their increased debt from the time the COVID-19 subsides.

• Industry Promotion Research
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• v.9 no.3
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• pp.1-11
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• 2024

At shareholders' meetings, minority shareholders are inferior in information to owners and majority shareholders, and they are often excluded from important decision-making. As a result, the rights and interests of minority shareholders are often damaged, which acts as a factor that hinders corporate value. The electronic voting system is expected to encourage minority shareholders to participate in management decision-making, which is expected to help increase corporate value. The results of the analysis in this study are summarized as follows. First, it was found that there was no difference between the earnings persistence of companies that introduced the electronic voting system and the earnings persistence of companies that did not. Second, we found no evidence that the introduction of the electronic voting system would increase the value of firms. Third, the effect of earnings persistence on corporate value of companies that adopted the electronic voting system was no different from that of firms that did not adopt it.

• Management & Information Systems Review
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• v.35 no.4
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• pp.123-140
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• 2016

This study investigates whether tax subsidy is associated with the information effect of future earnings (Future Earnings Response Coefficient, hereafter 'FERC'). Prior studies related with tax subsidy suggest that high- tax subsidy is associated with high-Conservatism. And high-tax subsidy is associated with low-information asymmetry. The hypothesis is tested by using sample firms listed on the Korean Stock Exchange from the year of 2002 to the year of 2009 inclusively. We followed methodology of Tucker and Zarowin (2006). We find that the regression coefficient for tax $subsidy{\times}X_{t3}$ shows a significant positive sign. Also, we performed additional test after controlling for variables related with FERC. The regression coefficient for tax $subsidy{\times}X_{t3}$ is consistent with main results. This result means that the changes in the current stock price of higher-tax subsidy contain more information about their future earnings than the changes in the stock price of lower-abnormal audit hours. The evidence suggests that investors positively understand high-tax subsidy.

• Management & Information Systems Review
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• v.36 no.3
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• pp.151-165
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• 2017

This study investigates the effect of revenue recognition by percentage of completion method on financial analysts' earnings forecasting information in order industry. Specifically, we examines how the analysts' earnings forecast errors and biases differ according to whether or not to report the unbilled revenue account balance and the level of unbilled revenue account balance. The sample consists of 453 firm-years listed in Korea Stock Exchange during the period from 2010 to 2014 since the information on unbilled revenue accounts can be obtained after the adoption of K-IFRS. The results are as follows. First, we find that the firms with unbilled revenue account balances have lower analysts' earnings forecast accuracy than the firms who do not report unbilled revue account balances. In addition, we find that the accuracy of analysts' earnings forecasts decreases as the amount of unbilled revenue increases. Unbilled revenue account balances occur when the revenue recognition of the contractor is faster than the client. There is a possibility that managerial discretionary judgment and estimation may intervene when the contractor calculates the progress rate. The difference between the actual progress of the construction and the progress recognized by the company lowers the predictive value of financial statements. Our results suggest that the analysts' earnings forecasts may be more difficult for the firms that report unbilled revenue balances as applying the revenue recognition method based on the progress criteria. Second, we find that the firms reporting unbilled revenue account balances tend to have higher the optimistic biases in analysts' earnings forecast than the firms who do not report unbilled revenue account balances. And we find that the analysts' earnings forecast biases are increases as the amount of unbilled revenue increases. This study suggests an effort to reduce the arbitrary adjustment and estimation in the measurement of the progress as well as the introduction of the progress measurement method which can reflect the actual progress. Investors are encouraged to invest and analyze the characteristics of the order-based industry accounting standards. In addition, the results of this study empower the accounting transparency enhancement plan for order industry proposed by the policy authorities.

• Journal of Industrial Convergence
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• v.20 no.12
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• pp.59-70
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• 2022

This study investigates the sensitivity reflected in the accounting earnings differs according to the difference in the characteristics of accounting information such as profit and loss for the same market information. For this, market information and accounting data were analyzed for 11,462 non-financial listed companies listed on the KOSPI and KOSDAQ markets from 2012 to 2020 by using Basu's measurement of conditional conservatism and Ball and Shivakumar's measurement of conservatism. Accounting earnings sensitivity was analyzed according to the combination of information. As a result of the study, it was confirmed that both earnings and losses corporates recognize losses with delay, while losses are recognized quickly by loss corporates and delayed recognition by earnings companies. It was confirmed that more strict conservatism was applied to the losses corporates compared to the earnings corporates by delaying the recognition of earnings while the early recognition of the losses. It provides empirical data on the causality between the asymmetric timeliness and the combined effect of market information and accounting information by verifying that the losses corporates responds sensitively to market information while the earnings corporates does not react sensitively to the market information.

• Management & Information Systems Review
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• v.30 no.3
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• pp.169-190
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• 2011

Recent academic studies have investigated book-tax differences as an indicator of earnings management. Tax accounting texts claim that the differences between pre-tax financial reporting earnings and taxable income can provide information about current earnings, and the large differences between book and taxable incomes are an indicator of low-quality financial reporting earnings. This study investigates the effect of internal control system over book and tax difference using the KOSPI and KOSDAQ firms from 2006 to 2008. The empirical findings are consistent with a weakness of internal control system being associated with higher book-tax difference. That means a firm which has material weakness in the internal control system allows for more malpractice. In addition to this, If the managers tries to the efficient tax decrease strategy, book-tax difference can be large. Which in turn leads us to observe a positive relation between the weakness of internal control system and intensity of book-tax difference. Overall, we interpret this evidence as indicating that the failure of the internal control system can effect not only investors and creditors but also tax authorities. And It emphasizes that a more effective internal control system linked with sound corporate governance.

• Journal of the Korean Operations Research and Management Science Society
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• v.29 no.1
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• pp.31-41
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• 2004

This study analyzes the structure of the variations In the domestic bank earnings and examines their dynamic features by estimating the short-run response and the long-run adjustment Process after the changes in financial market variables. A system of the equations for the bank stock price index and KOSPI is formulated to utilize the whole information in the market and simultaneously estimated to identify the relationships between the market variables and the bank earnings. Since the bank stock price is found to be responsive to changes in none of the market variables in the short run, while being relatively responsive to dollar exchange rate and business state, It implies that a good economic conditions and a stable foreign exchange rate should be maintained to Improve the level of the stock price In the long run. In addition, the dynamic structure of the responses of the bank stock price index and KOSPI to the initial changes in the market variable are compared and anlayzed. The response of the bank stock price appears to take much longer in adjusting to the long-run eouilibrium level than that of KOSPI. As a result, the cumulative response of the bank stock price index over time is found much bigger than that of HOSPI.