外文翻译试论在中国通过资产减值转回的盈余管理的激励机制.docx

外文翻译试论在中国通过资产减值转回的盈余管理的激励机制.docx

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外文翻译试论在中国通过资产减值转回的盈余管理的激励机制

本科毕业论文（设计）

外文翻译

外文题目Discussionof“RegulatoryIncentives

forEarningsManagementthroughAsset

ImpairmentReversalsinChina”

外文出处JournalofAccounting,Auditing&Finance

外文作者EdwardJ.Riedl

原文：

Discussionof“RegulatoryIncentivesforEarningsManagementthroughAssetImpairmentReversalsinChina”

ShiminChen,YuetangWang,andZiyeZhao（2009）examinemotivationsformanagersofChinese-listedfirmstoreportassetimpairmentreversals.ThestudydocumentsthatthereportofsuchreversalsreflectsincentivestoavoiddelistingfromChinesestockexchangesandthosestrongermonitoringmechanismsattenuatethisopportunisticreporting.ThestudyexploitsauniquefeatureoffinancialreportingwithinChina,whichallowslargesampleinvestigationofimpairmentreversals.Idiscussthestudy’sstrengths,notesomelimitationsontheanalysesandinferences,andsuggestrecommendationsforfutureresearch.

1.Introduction

ShiminChen,YuetangWang,andZiyeZhao（hereafterCWZ）examinemotivationsformanagersofChinese-listedfirmstoreportassetimpairmentreversals.TheprimaryresultssuggestthatthereportingofsuchreversalsreflectsincentivestoavoiddelistingfromChinesestockexchange.Additionalanalysesrevealthatstrongermonitoringmechanismsattenuatethisopportunisticreporting.ThestudyexploitsauniquefeatureoffinancialreportingwithinChina,whichallowslargesampleinvestigationofimpairmentreversals.Below,Idiscussthemanuscript’sstrengths,notesomelimitationsontheanalysesandinferences,andsuggestrecommendationsforfutureresearch.

2.Strengths

2.1UniqueAccrualandSetting

Abroadpriorliteratureexamines“specialitems,”typicallydefinedtoencompassnonrecurringortransitoryincomestatementreportingitems.Themostcommonexamplesincludeassetimpairments,restructuringcharges,andgainsorlossesonsalesofassets,withpapersfocusingontheeconomicdeterminantsandreportingincentivesformanagerstoreportspecialitems,aswellasthelatter’sassociationswithmarketmeasures（e.g.,Bartov[1993];ElliottandHanna[1996];Francis,Hanna,andVincent[1996];Burgstahler,Jiambalvo,andShevlin[2002];Riedl[2004]）.CWZaddstothisliteraturebyexamininganuncommonaccrual:

thereversalofassetimpairments.Firms’abilitytoreportthistypeofaccrualisfairlyuniquetotheChinesesetting:

SuchreversalsaregenerallyprohibitedunderU.S.GenerallyAcceptedAccountingPrinciples（GAAP）;areallowedincertaincircumstancesbutinfrequentlyreportedundertherelevantinternationalaccountingstandards;andhavebeenallowedundercertaindomesticaccountingstandards（e.g.,revaluationswithinAustralia）,thoughtypicallyreporteddirectlytoequity（andthuswithoutanyassociatedeffectonnetincome）.Asaresult,priorresearchhasexaminedonlylimitedcircumstancesofreversalsofprioraccruals,focusingonreversalsofrestructuringcharges（Moehrle[2002]）andassetrevaluations（e.g.,Easton,Eddey,andHarris[1993]）.Furthermore,thefactthattheCWZstudyissetinChinareflectsthegeneralmanufacturingbase（andthushighlevelofreportedtangibleassets）ofthebroadeconomy,thusaffordingasubstantialnumberofobservationsandpowertoconducttheanalyses.

2.2ClearlyDefinedRegulatoryIncentives

CWZexploitstheexplicitandwell-definedregulatoryincentivesthatlistedChinesefirmsfacetoavoidreportinglosses.Specifically,thestudyhighlightsthatfirmsreportingtwosuccessiveyearsofaccountinglossesreceiveaparticulardesignationonthetickersymbolthatdenotestheriskofdelisting;reportingthreesuccessiveyearsoflossesleadstodelisting.WhilepriorresearchprovidessomeevidenceconsistentwithU.S.firmsbeinglesslikelytoreportimpairmentstoavoiddelisting（e.g.,BeattyandWeber[2006]）,thethresholdsarespecifictoparticularstockexchangesandlessclearlydefined.Furthermore,becausetheUnitedStatesgenerallyprohibitsfirmsfromreversingimpairments,thelinkbetweentheobservedreportingchoiceandregulatoryincentivemustbeinferredfromtheabsenceofareportedimpairment.Insomecontrast,thecurrentsettingallowsastrongcouplingbetweenaclearlydefinedregulatoryincentive（delistingduetoastringofreportedlosses）andanobservedincome-increasingaccrualwithsubstantialdiscretion（theimpairmentreversal）.

2.3KeyConstructsSubjecttoLowerMeasurementError

Priorresearchexaminingspecialitemstypicallyemploysextensivehand-collectionofdatafromearningsannouncements,annualreports,footnotes,andothersourcedoucuments.1Furthermore,thepresentationofspecialitemsisnotwelldefinedintheaccountingstandards,leadingtolargevariationinthelevelofdetailanddisclosure（e.g.,disclosurebylargerversussmallerfirms）.Thus,priorstudiesofspecialitemsbeartheburdenofpotentiallynoisymeasurementintheexperimentalconstruct.InthesettingofCWZ,ChineseGAAPrequirestabularpresentationofanyimpairmentreversals.Asaresult,thisaffordsanunusualopportunitytoreducemeasurementerrorarisingfromhand-collectionandcodingofdata.2

1.Compustatbeganprovidingdecomposedcategoriesofspecialitems（e.g.,write-offs,restructuringcharges）asof2002;previously,specialitemswereavailableelectronicallyonlyinaggregateform.Thus,hand-collectionofdataprimarilyaffectsstudieswithsampleperiodspreceding2002.

2.Themeasurementerroralludedtointhisparagraphisthecodingofthedatabytheresearcher.Thisisdistinctfromanymeasurementerrorarisingbythereportingfirmmanagementduetoerrorintheestimationoftheobservedeconomicevent,aswellaspotentialbiasinthereportingoftheamount.

3.Limitations

3.1RegulatorsAssumedtobeNaïveUsers

TheresultsofCWZsuggestthatfirmsaremorelikelytoundertakeimpairmentreversalswhenthereareincentivestoavoiddelisting.WhatisunclearistheroleofChineseregulatorsinevaluatingreportednumberstoassessdelistingrequirements.Specifically,doregulatorsreviewreportedamountsorsimplyacceptreportednumbersasgiven?

Dotheyhavethefacilitytodetectlikelymanipulation?

Dotheyimposepenaltiesforclearviolationsofthedelistingrequirements?

Overall,towhatdegreetoassumethatregulatorsarenaïveusersofaccountinginformation,acceptingfiguresasreported.Thisseemsparticularlyatoddswiththerelativehightransparencyoftheimpairmentreversalsunderinvestigation（e.g.,owingtotherequiredtabularreportingformat）,aswellasmanyofthereversalsrelatingtorelativelyeasytovalueshort-termassets（seeSection3.3）.Thissuggeststhatregulatorscaneasilyascertaininstancesinwhichthisaccrualmovesfirmsfromviolationtononviolationowingtoaclearlydefinedthreshold（negativeearnings;seeSection2.2）.Thus,weareleftwonderingwhattherealevaluativecapacityisforregulatorsinthissetting,andwhetherthisaccrualisaneffectivemechanismthatallowsmanagerstoavoidthiscontractingcost.

Itispossible,however,thatmanagersofthesamplefirmssimplyperceivethatregulators（withsomeprobability）willneitherdetectnorpursueadjustmentstotheseaccruals,regardlessofregulators’actualdetectionorenforcementcapabilities.Ifmanagerswerebehavinginthismanner,thiswouldlikelymanifestinfirmsreportingimpairmentreversalstoavoiddelistingasobservedinthecurrentstudy,butalsoinsomesubsetoffirmshavingthereversalssubsequentlydisallowedbyregulators（andpotentiallydelistedasaresult）.IdiscussthispossibilityinSection4.

3.2WhatAretheExplicitCoststoDelisting?

Whiledelistingwouldintuitivelyseemtobeacostlyoutcomeforagivenfirm,thecurrentstudyislessclearonidentifying（andexploiting）whatthespecificcostsmaybe.First,itisunclearthatsubstantialhurdlesexistforfirms’sharestobe“relisted.”Related,priorliteraturehasnotestablished（inthissetting）thatfirmspreviouslydelistedfacesubstantialincrementalcosts（e.g.,highercostsofcapital）uponreentryintothecapitalmarkets.Second,themanuscriptwouldbenefitfrominsightsintotheeconomicreasonsmanagersofthesefirmswishtoavoiddelisting.Suchreasonscouldvaryacrossfirmsandcouldprovideanadditionalvenueforexamination.Forexample,docertainfirmsrequireadditionalcapital（whethertofundgrowthormaintainoperations）,andthusavoiddelistingtoallowsubsequentstockissuances?

Dotheownersofcertainfirmsattempttocashouttheirholdings,andthusavoiddelistingtoallowsubsequentdisposalofshares?

Arethereexpectationsoflitigationcostsarisingfromshareholderlawsuitsduetodelisting?

Furtherevidenceonthesereasonswouldprovidemoreexplicitlinksonthemotivationstoreportthisaccrualtoavoiddelisting.

3.3ReconcilingtheReversalstotheNatureoftheAssets

CWZprovidesdetailonthedistributionofassetsforwhichimpairmentreversalsarereported（seeTable2）.Itisinterestingthatasubstantialportionofthesamplereversalsareforassetstypicallydefinedasshort-termassets.3Thisraisestwoissues.First,assumingthattheimpairmentswerereportedinthepreviousfiscalcycle（potentiallytheprioryear）,andbecausesuchassetsshould,bydefinition,beconvertedintocashduringtheensuingyear,itappearsoddthatimpairmentsfortheseparticularassetscouldbereversedwithvaluesaddedbacktothebalancesheetasunrealizedreversalsinthecurrentyear.Thatis,howdotheseassetsremaincategorizedasshort-termassets?

Second,andmoreimportant,thesetypesofassetsarefarmorelikelytohaveobservablemarketvalues,owingtotheirshortertermand（likely）