Can Information Transparency Improve Earnings Quality Attributes? Evidence from an Enhanced Disclosure Regime in Taiwan

Yeh, Yaying Mary Chou; Chen, Hui-Wen; Wu, Mei-Ching

doi:10.2753/ree1540-496x500414

Cited by 19 publications

(12 citation statements)

References 43 publications

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“…According to Heij et al (2004), the common measure for persistence is the autocorrelation of earnings where high autocorrelation between current and past income is desirable. The following equation was used in this study using a total of five years (2010 to 2014) to measure EP (Dichev and Tang, 2008; Yeh et al , 2014): where IBXI it is income before extraordinary items for company i ; and AVASS it is average of total assets for company i at the end of years t and t − 1.…”

Section: Methodsmentioning

confidence: 99%

“…However, many assert that the ES should be considered to be a proxy to measure the EQ. According to Bowen et al (2008), Khalil and Simon (2014) and Yeh et al (2014), the following equation is used for the five years from 2010 to 2014 to measure ES: where σ is standard deviation for company i ; OCF it is operating cash flows in year t ; EBXI it is net income before extraordinary items in year t.…”

Section: Methodsmentioning

confidence: 99%

“…Based on agency theory, the first argument suggests that, when different information exists between insiders and shareholders, shareholders have motives to request more information from company management (Grossman and Hart, 1980; Verrecchia, 1990). In the context of this argument, Francis et al (2008) and Yeh et al (2014) say that the relationship between EQ and CVD is substitutive or negative, wherein companies having poor (good) EQ will disclose more (less) expansive information because the information asymmetry in those companies is high (low) between management and investors. The other argument is that increasing information quality creates motives for managers to disclose more information (Verrecchia, 1990).…”

Section: Theoretical Framework and Literature Reviewmentioning

confidence: 99%

“…Achieving high EQ creates a motive for managers to disclose more information (Ebrahimabadi and Asadi, 2016; Verrecchia, 1990). This means that companies that have good EQ will disclose more expansive information because the stakeholders will treat such information as more credible (Francis et al , 2008; Yeh et al , 2014). Therefore, these companies gain benefits from CVD, especially the ability to instil confidence among investors in the wake of the 2007-2008 worldwide financial crisis.…”

Section: Introductionmentioning

confidence: 99%

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Voluntary disclosure and earnings quality: evidence from ownership concentration environment

Karajeh

2019

MRR

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Purpose This study aims to investigate the relationship between earnings quality and corporate voluntary disclosure among Malaysian listed companies. Moreover, it examines the moderating effect of the ownership structure on the relationship between earnings quality and corporate voluntary disclosure. Design/methodology/approach This study covers 300 companies listed on Bursa Malaysia. It has used strategic, financial and non-financial information to measure voluntary disclosure; earnings management, persistence and smoothness to measure earnings quality; and institutional and managerial shareholders to measure ownership structure. Hierarchical regression analysis was used to investigate if ownership structure moderates the relationship between earnings quality and corporate voluntary disclosure. Findings The results in this work imply that companies with high earnings quality are more likely to disclose voluntary information to help stakeholders. Furthermore, this study provides original evidence that institutional ownership and managerial ownership play a main role as moderating variables that influence management motives toward practices of voluntary disclosure and earnings quality. Originality/value Because of the limited number of empirical studies on the relationship between voluntary disclosure and earnings quality, this study fills a gap in the literature by investigating the relationship between them. In addition, a lack of research exists on the effects of ownership structure on the relationship between voluntary disclosure and the earnings quality. Therefore, this study makes an original contribution to the literature by using institutional and managerial ownership as moderating variables to investigate the effects of the ownership structure on the relationship between voluntary disclosure and earnings quality in Malaysian companies.

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Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Theoretical Framework and Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Voluntary disclosure and earnings quality: evidence from ownership concentration environment

Karajeh

2019

MRR

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“…To better understand how opacity moderates this relation, a firm‐level measure of information opacity, that is, disclosure quality is used in the current study. Prior research finds that higher disclosure quality is associated with lower information asymmetry (Brown & Hillegeist, 2007; Healy, Hutton, & Palepu, 1999; Heflin, Shaw, & Wild, 2005; Welker, 1995) and higher earnings quality (Blanco, García Lara, & Tribó, 2014; Katmon & Farooque, 2017; Shaw, 2003; Yeh, Chen, & Wu, 2014).…”

Section: Background Literature and Hypothesesmentioning

confidence: 99%

Analyst following, disclosure quality, and discretionary impairments: Evidence from China

Jiang

2020

Financ Manag Account

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Financial statement preparers' discretion in fair value measurements is integral to asset impairment accounting. Firms may misuse this discretion to report more or less impairment loss than is warranted by underlying economic circumstances. Using data from a sample of publicly listed firms in China, this study finds that analyst following reduces abnormal impairment loss, the portion of reported impairment loss that cannot be explained by corporate economic circumstances and that this effect is more pronounced for firms with lower information disclosure quality. However, the reducing effects of analyst following and its interaction with disclosure quality are greater for income-decreasing than for income-increasing abnormal impairment loss. Additional analyses support the argument that these differences are attributable to the dominance of accounting's contracting role over its informational role. Overall, the findings indicate that the influence of analyst following on discretionary impairment accounting decisions is moderated by disclosure quality and by the relative importance of accounting's contracting and informational roles in an emerging market setting.

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Chief executive officer (CEO)’s rural origin and internal control quality

et al. 2021

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Can Information Transparency Improve Earnings Quality Attributes? Evidence from an Enhanced Disclosure Regime in Taiwan

Cited by 19 publications

References 43 publications

Voluntary disclosure and earnings quality: evidence from ownership concentration environment

Voluntary disclosure and earnings quality: evidence from ownership concentration environment

Analyst following, disclosure quality, and discretionary impairments: Evidence from China

Chief executive officer (CEO)’s rural origin and internal control quality

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