Abstract
Related party transactions are conducted between components within an affiliated business group and these transactions in the normal course of operations are beneficial for the improvement of the operating performance of the group. However, abnormal related party transactions can be used by managers of the group to manipulate financial statements. If auditors of the group can better understand the content and characteristics of related party transactions, then they can determine the rationality of the transactions and further inhibit improper transactions more accurately. The findings of this study indicate that most components of an affiliated business group are audited by auditors from different CPA firms that do not fully understand the nature of related party transactions. As such, affiliated business groups may conduct related party transactions by means of nonoperating activities, which could decrease earnings persistence. Yet, when components of the affiliated business group are audited by the same firm, as opposed to being audited by different firms, earnings persistence would not be decreased. It is noteworthy that the results have to do with the significance of the companies under discussion for the following: either the CPA firm conducting the audits is big or the affiliated business group itself is big.
| Original language | Chinese |
|---|---|
| Pages (from-to) | 33-60 |
| Number of pages | 28 |
| Journal | NTU Management Review |
| Volume | 28 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 2018 Aug 1 |
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All Science Journal Classification (ASJC) codes
- Business, Management and Accounting(all)
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集團企業營業活動外關係人交易對盈餘持續性之影響:委託同一會計師事務所查核財務報表之效果. / Fang, Chun Ju; Chang, Ruey Dang.
In: NTU Management Review, Vol. 28, No. 2, 01.08.2018, p. 33-60.Research output: Contribution to journal › Article
TY - JOUR
T1 - 集團企業營業活動外關係人交易對盈餘持續性之影響:委託同一會計師事務所查核財務報表之效果
AU - Fang, Chun Ju
AU - Chang, Ruey Dang
PY - 2018/8/1
Y1 - 2018/8/1
N2 - Related party transactions are conducted between components within an affiliated business group and these transactions in the normal course of operations are beneficial for the improvement of the operating performance of the group. However, abnormal related party transactions can be used by managers of the group to manipulate financial statements. If auditors of the group can better understand the content and characteristics of related party transactions, then they can determine the rationality of the transactions and further inhibit improper transactions more accurately. The findings of this study indicate that most components of an affiliated business group are audited by auditors from different CPA firms that do not fully understand the nature of related party transactions. As such, affiliated business groups may conduct related party transactions by means of nonoperating activities, which could decrease earnings persistence. Yet, when components of the affiliated business group are audited by the same firm, as opposed to being audited by different firms, earnings persistence would not be decreased. It is noteworthy that the results have to do with the significance of the companies under discussion for the following: either the CPA firm conducting the audits is big or the affiliated business group itself is big.
AB - Related party transactions are conducted between components within an affiliated business group and these transactions in the normal course of operations are beneficial for the improvement of the operating performance of the group. However, abnormal related party transactions can be used by managers of the group to manipulate financial statements. If auditors of the group can better understand the content and characteristics of related party transactions, then they can determine the rationality of the transactions and further inhibit improper transactions more accurately. The findings of this study indicate that most components of an affiliated business group are audited by auditors from different CPA firms that do not fully understand the nature of related party transactions. As such, affiliated business groups may conduct related party transactions by means of nonoperating activities, which could decrease earnings persistence. Yet, when components of the affiliated business group are audited by the same firm, as opposed to being audited by different firms, earnings persistence would not be decreased. It is noteworthy that the results have to do with the significance of the companies under discussion for the following: either the CPA firm conducting the audits is big or the affiliated business group itself is big.
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UR - http://www.scopus.com/inward/citedby.url?scp=85064059715&partnerID=8YFLogxK
U2 - 10.6226/NTUMR.201808_28(2).0002
DO - 10.6226/NTUMR.201808_28(2).0002
M3 - Article
AN - SCOPUS:85064059715
VL - 28
SP - 33
EP - 60
JO - NTU Management Review
JF - NTU Management Review
SN - 1018-1601
IS - 2
ER -