Abstract

Based on the Taiwan's listed companies from 1992 to 2000, we analyze whether the difference between audited earnings and unaudited earnings, which will be required to be disclosed, is affected by firm size, debt ratio, management ownership, positive news, and audit quality. The difference between unaudited earnings and audited earnings are measured by two-tier （discrete） method and continuous method, and the Logistic and OLS regressions are applied, respectively. The empirical results are summarized as follows: the larger the firm size is, the smaller the difference between unaudited earnings and audited earnings is. The lower the debt ratio is, the smaller the difference between unaudited earnings and audited earnings is. The higher the management ownership is, the smaller the difference between unaudited earnings and audited earnings is. The company with positive news exist the smaller difference between unaudited earnings and audited earnings. The better the quality of the CPA auditing the audited earnings is, the smaller the difference between unaudited earnings and audited earnings is. In addition, we find that the results of OLS models are not significant statistically. However, those of Logistic models are. It may mean that there exists a material threshold, such as 10% or 20%, on the difference between unaudited earnings and audited earnings.