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 98 Note a : The t -test examine the null hypothesis that the mean difference is zero. b : The Wilcoxon test, a nonparametric statistical method, examine the null hypothesis that the median difference is zero. c : Probability values denote the significance levels to reject the null hypothesis and accept the alternative hypothesis for two-tailed t -tests (Wilcoxon tests) of differences in means (medians). d : Variable definitions: ROA it = firm i ’s return on assets, which equals net income divided by total assets at the end of t ; LEV it = firm i ’s total liabilities divided by total assets at the end of t -1; MV it = the natural logarithm of firm i ’s market value of equity at the end of t ; NMKT it = the number of foreign markets, excluding the U.S., in which firm i ’s shares are traded during year t ; CS it = an indicator variable equal to 1 if there is an increase in firm i ’s par value of common stock during year t ; LT_DEBT it = an indicator variable equal to 1 if there is an increase in firm i ’s long-term debt during year t . DA it = firm i ’s discretionary accruals computed using the Modified Jones (1991) model; RM_PROD it = firm i ’s abnormal production costs, where production costs are defined as the sum of cost of goods sold and the change in inventories; RM_DISX it = firm i ’s abnormal discretionary expenses multiplied by -1, where discretionary expenses are the sum of advertising expenses, R&D expenses, and SG&A expenses; RM_SUM it = the sum of R_ PROD it and R_DISX it ; BBATH it = an indicator variable equal to 1 when firm i ’s ROE ranks in the bottom 20% of its industry, and 0 otherwise; SM_SUM it = the difference between firm i ’s earnings (measured before discretionary accruals, abnormal production costs, and abnormal discretionary expenditures) for year t and earnings for year t -1, divided by total assets at the end of t -1, when this change is either above the median of nonzero positive values or below the median of nonzero negative values of this variable, and 0 otherwise; SM_PROD it = the difference between firm i ’s earnings (measured before discretionary accruals and abnormal production costs) for year t and earnings for year t -1, divided by total assets at the end of t -1, when this change is either above the median of nonzero positive values or below the median of nonzero negative values of this variable, and 0 otherwise; SM_DISX it = the difference between firm i ’s earnings (measured before discretionary accruals and abnormal discretionary expenditures) for year t and earnings for year t -1, divided by total assets at the end of t -1, when this change is either above the median of nonzero positive values or below the median of nonzero negative values of this variable, and 0 otherwise; DEBT it = firm i ’s total debt divided by total assets at the end of t -1; ST_DEBT it = firm i ’s short-term debt divided by total debt at the end of t -1;