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

119 NTU Management Review Vol. 30 No. 2 Aug. 2020 Group D1 D2 D3 Voluntary IFRS observations after the regulatory change (A) 1 0 0 Voluntary IFRS observations before the regulatory change (B) 0 1 0 Mandatory IFRS observations (C) 0 0 1 Group A’s matched domestic observations (D) 0 0 0 The regression models incorporating the three dummy variables (i.e., D1 , D2, D3 ) are as follows: DA it = τ 0 + τ 1 RM it + τ 2 BBATH it + τ 3 SMOOTH it + τ 4 DEBT it + τ 5 ST_DEBT it + τ 6 BIG it + τ 7 MV it + τ 8 EARN it + τ 9 DA it-1 + τ 10 MILL it + τ 11 D1 it + τ 12 D2 it + τ 13 D3 it + ε it RM it = δ 0 + δ 1 DA it + δ 2 BBATH it + δ 3 SMOOTH it + δ 4 DEBT it + δ 5 ST_DEBT it + δ 6 BIG it + δ 7 MV it + δ 8 EARN it + δ 9 LTGN it + δ 10 MILL it + δ 11 D1 it + δ 12 D2 it + δ 13 D3 it + ε it Columns (i), (iii), and (v) of Table 7 show that the coefficients on D1 it and D2 it are all positive and significant at better than p = 1%, suggesting that firms that changed their filing choice to IFRS voluntarily after the elimination and those that voluntarily adopted IFRS prior to the regulatory change manipulate accruals upward at a greater extent than firms that are required to use IFRS by their home jurisdiction and those that applied domestic standards after the regulatory change. In addition, columns (i), (iii), and (v) of Table 7 indicate that the coefficients on D3 it are all negative and significant at better than p = 1%, revealing that mandatory IFRS firms ‘‘fine-tune’’ accruals downward at a greater magnitude than the other three groups of firms. Columns (ii), (iv), and (vi) of Table 7 document that the coefficients on D1 it and D2 it are all positive and significant at better than p = 10%, suggesting that firms that changed their filing choice to IFRS voluntarily after the elimination and those that adopted IFRS voluntarily prior to the regulatory change alter real activities to manage earnings upward at a greater extent than firms that are required to use IFRS by their home jurisdiction and those that applied domestic standards after the regulatory change. Moreover, columns (ii), (iv), and (vi) of Table 7 show that the coefficients on D3 it are all negative and significant at better than p = 5%, indicating that mandatory IFRS firms engage in real activities manipulation to reduce earnings at a greater magnitude than their counterparts.