Can information transparency improve earnings quality attributes? Evidence from an enhanced disclosure regime in Taiwan

• Autores: Yaying Mary Chou Yeha, Hui-Wen Chen, Mei-Ching Wu
• Localización: Emerging Markets Finance & Trade, ISSN-e 1558-0938, Vol. 50, Nº. 4, 2014, págs. 237-253
• Idioma: inglés
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• Resumen

  • Investors demand timely and accurate corporate disclosures in order to comprehend the governance and performance of a firm; they also rely on quality earnings information to assess the intrinsic value of a company. This study links the two using a Taiwan sample because the government of Taiwan has just performed a market-wide corporate-transparency rating. We find significant improvement on four accounting-based earnings-quality attributes, including accrual quality, earnings persistence, predictability, and smoothness. Further, there is a statistically reliable association between the level of information transparency and each of these earnings attributes, implying that a disclosure mechanism design can enhance management accountability in financial reporting