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題名 Equity-Based Executive Compensation, Managerial Legal Liability Coverage and Earnings Management
作者 Weng, Tzu-Ching;Tseng, Chia-Hsuan;Chen, Chun-Ho;Hsu, Yun-Sheng
曾家璿
貢獻者 會計系
關鍵詞 Equity-based compensation;Directors’ and officers’ liability insurance coverage;Earnings management
日期 2014-05
上傳時間 15-Sep-2015 15:28:22 (UTC+8)
摘要 This study investigates how managers’ compensation incentives, as measured by equity-based executive compensation and managerial legal liability coverage affect earnings management. The availability of compensation may encourage managers to adopt more aggressive accounting practices; however, the higher the legal liability managers face, the more it will reduce their willingness to engage in such risk-taking behavior. Once managers mitigate their personal legal liability through directors’ and officers’ (D&O) liability insurance, they may be more inclined to manipulate reported earnings. We use excess D&O liability insurance coverage as a proxy for managerial liability coverage and test a sample of listed firms in Taiwan where D&O liability insurance purchases are publicly disclosed. We find that managers whose compensation is equity-based are more likely to adopt an opportunistic accounting strategy when they are covered by relatively high levels of D&O liability insurance; this suggests that the primary determination of earnings management is the joint effect of an increase in managers’ compensation incentives and a decrease in their legal liability.
關聯 Journal of Applied Finance and Banking, 4(3), 167-193
資料類型 article
dc.contributor 會計系
dc.creator (作者) Weng, Tzu-Ching;Tseng, Chia-Hsuan;Chen, Chun-Ho;Hsu, Yun-Sheng
dc.creator (作者) 曾家璿zh_TW
dc.date (日期) 2014-05
dc.date.accessioned 15-Sep-2015 15:28:22 (UTC+8)-
dc.date.available 15-Sep-2015 15:28:22 (UTC+8)-
dc.date.issued (上傳時間) 15-Sep-2015 15:28:22 (UTC+8)-
dc.identifier.uri (URI) http://nccur.lib.nccu.edu.tw/handle/140.119/78509-
dc.description.abstract (摘要) This study investigates how managers’ compensation incentives, as measured by equity-based executive compensation and managerial legal liability coverage affect earnings management. The availability of compensation may encourage managers to adopt more aggressive accounting practices; however, the higher the legal liability managers face, the more it will reduce their willingness to engage in such risk-taking behavior. Once managers mitigate their personal legal liability through directors’ and officers’ (D&O) liability insurance, they may be more inclined to manipulate reported earnings. We use excess D&O liability insurance coverage as a proxy for managerial liability coverage and test a sample of listed firms in Taiwan where D&O liability insurance purchases are publicly disclosed. We find that managers whose compensation is equity-based are more likely to adopt an opportunistic accounting strategy when they are covered by relatively high levels of D&O liability insurance; this suggests that the primary determination of earnings management is the joint effect of an increase in managers’ compensation incentives and a decrease in their legal liability.
dc.format.extent 341375 bytes-
dc.format.mimetype application/pdf-
dc.relation (關聯) Journal of Applied Finance and Banking, 4(3), 167-193
dc.subject (關鍵詞) Equity-based compensation;Directors’ and officers’ liability insurance coverage;Earnings management
dc.title (題名) Equity-Based Executive Compensation, Managerial Legal Liability Coverage and Earnings Management
dc.type (資料類型) articleen