This study examined the effect on earnings management disclosure set Taiwanese companies doing business with China as its institutional setting. By measuring the amount of earnings management by discretionary accruals (DACCs), this study shows that Taiwanese companies entering DACCs disclosure on transactions with related parties with the Chinese reduced. After the adoption of the provisions disclosed in November 2000, the Taiwanese company DACCs performing maritime-related transactions declined. While the disclosure rules will help to reduce earnings management, this study reports that such asymmetric effects between high-tech and high-tech enterprise.
In particular, disclosure in reducing earnings management among high-tech companies in the non-effective. However, such an effect among high-tech companies in the sector and not significant. Experimental study on the implications of these findings for management companies, regulatory agencies, and shareholders of the company.