||The Relationship among Audit Committee, Segment Reporting Quality, and Investment Efficiency:Evidence from Firms in Taiwan
||Department of Accountancy
在台灣，現有的會計準則逐步被國際財務報告準則(International Financial Reporting Standards, IFRS) 取代。企業在2011年開始，必須依據國際財務報告準則第八號「營運部門」規定，採用管理法(management approach) 來揭露營運部門資訊。在這新的會計準則下，提供了管理決策者一個機會去掩飾獲利較差的營運部門。因此，審計委員會應該在此時監督管理決策者，並促進部門報導品質。然而，設立審計委員會對部分公司是不具強制性的。此現象使我對於「審計委員會是否能夠增加部門報導品質」產生研究動機。
In Taiwan, original accounting standards gradually are replaced by IFRS. Following IFRS 8, Operating Segments, firms have to disclosure their segments information by management approach since 2011. Under the new approach, it gives managers an opportunity to conceal poor-performance segments. As a result, it is time for audit committees to oversee them and improve segment reporting quality. However, setting audit committee is not forced for all listed firms. The situation is an incentive for me to investigate whether audit committee can enhance segment reporting quality when adopting management approach.
Although there is agency cost for managers, they also take advantage of high quality segment information to make investment efficiency, especially for companies who are multinational or diversified. However, there is seldom evidence to confirm economic benefits from segment reporting quality. Investigating the relationship between segment reports and investment efficiency is the second object of this study. Combined the two investigations, I test the mediate effect of segment reporting quality between audit committee and investment efficiency.
By using listed firms in TWSE and OTC, the results confirm that segment reporting quality is better under the supervision of audit committee, and higher quality segment reporting quality mitigate over-investment in capital expenditure. There is no evidence to prove that segment reporting quality have mediate effect, but weak evidence shows that audit committee is a moderator between segment reporting quality and investment efficiency.
1. INTRODUCTION 1
1.1 The Background and Motivation of This Study 1
1.2 The Purpose of This Study 7
1.3 The Framework of This Study 7
2. LITERATURE REVIEW 9
2.1 Segment Reporting Requirements 9
2.2 The Determinants of Segment Reporting Quality 11
2.2.1 Proprietary Cost of Revealing Segment Information 11
2.2.2 Agency Cost of Revealing Segment Information 12
2.2.3 Financial Incentives of Revealing Segment Information 12
2.3 Audit committee and segment reporting quality 13
2.3.1 Independence 13
2.3.2 Professionalism 14
2.3.3 Diligence 14
2.4 Segment Reporting Quality and Investment Efficiency 15
2.5 Audit Committee and Investment Efficiency 16
3. RESEARCH DESIGN 17
3.1 The First Hypothesis 17
3.2 The Second Hypothesis 19
3.3 The Third Hypothesis 21
3.4 Research Design 22
3.4.1 The First Hypothesis 22
3.4.2 The Second Hypothesis 23
3.4.3 The Third Hypothesis 25
3.5 Variables Definitions 27
3.5.1 SRQ 27
3.5.2 AC 27
3.5.3 CAPEX 28
3.5.4 Control Variables for Proprietary Cost 28
3.5.5 Control Variables for Agency Cost 30
3.5.6 Control Variable for Financing Incentives 32
3.5.7 Other Control Variables for SRQ 32
3.5.8 Control Variables for CAPEX 34
3.6 Sample Selection 40
4. EMPIRICAL RESULTS 43
4.1 Descriptive Statistics 43
4.2 The Difference between Having and without Audit Committee 47
4.3 Correlation Analysis 48
4.4 Results of Regression Analysis 53
4.4.1 The Relationship between AC and SRQ 53
4.4.2 The Relationship between SRQ and CAPEX 54
4.5 Additional Test 69
5. CONCLUSIONS AND FUTURE RESEARCH 70
5.1 Conclusions 70
5.2 Contribution of this study 72
5.3 Limitations and recommendations for future research 72
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