臺大管理論叢 NTU Management Review VOL.30 NO.2

The Effects of Relaxing the Reconciliation Requirement in Foreign Private Issuers’ SEC Filings on Earnings Management Strategies: IFRS Adopters versus U.S. GAAPAdopters 110 We also re-estimate the simultaneous equations (6) and (7) after including three macroeconomic variables: Gross Domestic Product (GDP), foreign direct investment, and inflation rate for the countries where the sample firms domicile. We have no prediction pertaining to the coefficients on these variables. Untabulated results appear consistent with those in the primary analyses. That is, the inferences on managers’ trade-off decisions and the reporting incentive variables are not qualitatively different from those reported in Table 5. However, the coefficients on most of the macroeconomic factors are insignificant. Following prior relevant studies (e.g., Barth et al., 2012; Chiu and Lee, 2013; Hansen et al., 2014; Harris and Muller, 1999; Henry, Lin, and Yang, 2009; Kim et al., 2012), our primary analysis does not include explicit controls for macroeconomic factors. 7.4 Alternative Sample Selection For a robustness check, we remove firms in countries that mandate IFRS during the sample period or announce their intent to adopt the standards; those firms’ switch to IFRS may not be voluntary. Specifically, we repeat the analyses from 2SLS regression after deleting the following two groups of sample firms, respectively: (1) firms from Brazil (three), China (one), and Israel (one) that were required to use IFRS by their home jurisdiction during a sample year, and (2) firms from Brazil (four), Canada (three), and Korea (one), and Mexico (seven) that domicile in countries that have already made announcement of their adoption roadmap of IFRS in (or prior to) a sample year. 24.25 Untabulated results reveal essentially similar inferences between the IFRS test sample in the primary analysis and those excluding the two types of firms, respectively. 7.5 Representatives of Sample In untabulated results, we check for cross-sectional variation in the earnings management strategies, eliminating the potential confounding effect of tax avoidance. Specifically, we re-estimate equations (6) and (7) after removing the sample firms from 24 On 13 July 2007, the SEC of Brazil issued Rule No. 457 requiring listed companies to use IFRS for their financial reporting, starting with accounting periods ending in 2010. Given that three of the seven sample firms domiciling in Brazil adopted IFRS in 2010, we eliminate only these firms in this sensitivity test. 25 We do not exclude one firm that domicile in Argentina and two firms in Canada from the estimation because these firms voluntarily switched to IFRS prior to the announcement of their adoption roadmap of the standards.