We examine the rounding phenomenon (called <i>window dressing</i>) in financial reporting of U.S. high-tech and low-tech firms. By requiring that investments in research and development be expensed as incurred, the generally accepted accounting principles provide low-tech firms with a larger set of...

This study examines the effect of the implementation of corporate governance regulations on cosmetic earnings management in developed and emerging markets respectively. Using Benford's Law, the analysis employs 84,870 positive earnings observations for all publicly listed US and Taiwan companies...

We investigate the relationship between corporate social responsibility (CSR) and the cost of capital. In general, our results suggest that firms with CSR awards have lower cost of capital. In terms of firms' common risk factors, both book-to-market ratio and leverage are positively related to...

Firms have tendency to window dress their financial statements by reporting earnings to achieve reference points represented by <italic>N</italic> × 10<italic> -super-k </italic>. Such practice of reporting rounded earnings is likely due to (1) firms may believe that investors perceive a reported earnings of $1.99 million to be...

Most scholars have indicated corporations using accounting conservatism to reduce earnings manipulation, although certain scholars believe that firms have more incentive to increase earnings manipulation. Institutional investors play an important external monitoring role, and affect firm's...

Using Benford's (1938) law, this study documents pervasive evidence that managers of publicly listed Taiwanese firms tend to engage in earnings manipulative activities, rounding earnings numbers to achieve key reference points. Consistent with prior studies on rounding behavior in other...

Conventional studies assume that inside management plays a major role in corporate governance and argue that foreign institutional investors may lack incentives to monitor invested firms due to their short-term profit orientation. By utilizing 650 observations of Taiwan banks, this study...

Heaping is a phenomenon in which reported numbers tend to appear in increments that are important for cultural or other reasons. This study reports that heaping is present in monthly earnings reports for publicly listed companies in Taiwan. We find that Taiwanese firms tend to report monthly...

This paper empirically investigates the factors affecting auditors in evaluating information technology (IT) control structures by employing the COBIT framework, a popular IT internal control with integrated platform, and examines the relationship between monitoring function and other COBIT...

The purpose of this paper is to propose a hybrid model which combines locally linear embedding (LLE) algorithm and support vector machines (SVM) to predict the failure of firms based on past financial performance data. By making use of the LLE algorithm to perform dimension reduction for feature...