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NTU Management Review
Vol. 35 No. 1 Apr. 2025, 1-54
https://doi.org/10.6226/NTUMR.202504_35(1).0001

The Financial Statement Comparability of Listed Foreign
Firms in Taiwan: The Effect of Board Interlocks and Financial
Statement Fraud

海外來臺上市櫃企業財務報表可比較性之探討：考量董事
連結與舞弊案件之影響

Yuan-Tang Tsai, Department of Accountancy, National Taipei University
蔡元棠 / 國立臺北大學會計學系
Xing-Rong Li, Department of Accounting, National Taiwan University
李幸容 / 國立臺灣大學會計學系
Received 2022/8, Final revision received 2024/10

Abstract
The paper examines the changes in the financial statements comparability (Comparability)
of listed foreign firms in Taiwan (i.e. KY companies; KY) and non-KY companies
(NKY) surrounded by the case of Pharmally scandal in 2020. We find that, as a whole,
the comparability of KY is worse than NKY, and the comparability of NKY with board
interlocks to KY is also worse than NKY without board interlocks. More elaborately,
after the case of Pharmally scandal, the comparability of NKY has improved, regardless
of whether they are with board interlocks or not; however, the comparability of KY has
not improved and has even deteriorated compared to that of NKY. The possible reason is
that due to COVID-19, the auditors cannot conduct on-site audits of KY whose operating
locations are overseas, which has resulted in the inability to improve their comparability
in the short term and may even worsen it by not being able to conduct on-site audits. This
finding shows that under COVID-19, the company's operating location helps explain the
comparability of the financial statements.

【Keywords】financial statement comparability, listed foreign firms in Taiwan (KY), board
interlocks, COVID-19, the case of Pharmally

領域主編：戚務君教授

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