Abstract
To enable all listed companies to gradually upgrade and implement corporate governance, the appraisals are promoted to assist investors through the comparison of corporate governance appraisal (CGA) in Taiwan’s market. Using a panel data is based on the companies listed on the Taiwan Stock Exchange during the period 2014-2016; this paper provides evidence that earnings management is affected negatively by corporate governance quality.
 
 This is expected to guide healthy competition between enterprises and strengthen corporate governance. Recent studies have pointed out that managers are more favorable to their actions due to weak corporate governance. While most studies explored the relationship between corporate governance and financial performance, few studies have included in corporate governance appraisal (CGA).
 
 This study examines how CGA in Taiwan listed companies will affect their earnings quality and this study uses earnings management (EM) as measure of financial performance. In addition, reference is made to the Big 4 accounting firms to explain the consequences of CGA and, specifically, its effect on the quality of financial statements. The empirical results show that CGA and earnings management have a significantly negative correlation. In addition, the CGA of companies audited by the Big 4 indicate that those with better earnings quality also conduct less earnings management.
Highlights
To draw level with the rapid global development of corporate governance appraisal (CGA), the Financial Supervisory Commission (FSC) has actively promoted corporate governance policies from the government to the private sector in recent years and is expected to accelerate the promotion of corporate governance on the companies listed on the Taiwan Stock Exchange
This study examines how CGA on the companies listed on the Taiwan Stock Exchange will affect their earnings quality and this study uses earnings management as measure of financial performance
This study describes how corporate governance appraisal (CGA) in Taiwan listed companies will affect their earnings quality and this study uses earnings management (EM) as measure of financial performance for probing linear models and introduces macros for STATA statistical software to simplify the computations in ordinary least squares (OLS) and logistic regression
Summary
To draw level with the rapid global development of corporate governance appraisal (CGA), the Financial Supervisory Commission (FSC) has actively promoted corporate governance policies from the government to the private sector in recent years and is expected to accelerate the promotion of corporate governance on the companies listed on the Taiwan Stock Exchange. Information disclosure by Taiwan listed companies is an important part of corporate governance. Since 2003, the Taiwan Stock Exchange (TWSE) and Taipei Exchange (TPEx) have been commissioned by the Securities and Futures Institute to implement the “Information Disclosure Appraisal System.”. The two evaluation systems have been consolidated since 2015 in view of the important indicators of the “Information Disclosure Appraisal” in corporate governance appraisal (CGA), thereby improving the efficiency of the evaluation work and avoiding duplication of work.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
