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|Other Titles:||Accounting Conservatism and Employee Stock Option|
Chen, Chao-Jung;Hsu, Chung-Yuan
Accounting Conservatism;Stock Option;Accounting Information
|Issue Date:||2014-06-25 10:23:17 (UTC+8)|
Beginning from January 1, 2008, all companies in Taiwan are required to expense employee stock compensation using the fair value approach. However, for employee stock options granted during the transition period from the publication date of the exposure draft of Taiwan FAS39 to December 31, 2007, the government exempted those options from expensing, which increases a surge of option grants during the period. It is still unclear about the factors that may drive companies to take advantage of the transition period, and how market reacts to such behaviors. This paper examines whether the level of accounting conservatism is negatively associated with such opportunistic behaviors. Empirical results show that as a firm’s financial reporting gets more conservative, it is less likely that the firms took advantage of the exemption during the transition period. The results also show that among those firms issuing employee stock option during the transition period, market value is much higher for firms having higher level of accounting conservatism than lower level of conservatism. The results suggest that capital market rewards favorably to the conservative accounting policies and their employee stock option system.
|Relation:||會計評論 , 59 , 37-72|
|Appears in Collections:||[會計學系] 期刊論文|
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