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corporations. Using the 2013-2018 financial data available from the National Health
Insurance Administration, the study builds models to estimate the discretionary accruals
(e.g., float-point adjustment and allowance for National Health Insurance deduction) as
proxies for earnings management behavior of these hospitals. The results indicate that
compared to medical juridical persons, private hospitals employ discretionary accruals to
reduce income to a greater extent when pre-managed earnings are high; compared with
medical care corporations, medical care foundations use discretionary accruals to reduce
income to a greater extent when pre-managed earnings are high. This study not only
extends research scope to private hospitals and medical care corporations in Taiwan, it
also offers policy implications for regulators to consider revising the hospital governance
policy, for example, providing guidance regarding estimating discretionary accruals.

Hsiou-Wei Lin

San-Lin Chung
Chih-Ping Wei