Abstract

From fiscal year 2000, KSE and KOSDAQ companies have to disclose quarterly report. But only the reports of large companies (over assets 2 trillion won) are to be reviewed by the external auditor, so the reliability of quarterly financial information is questionable. This study tests two hypotheses using voluntarily reviewed samples. First, quarterly review is related to the decreased earnings management. Second, quarterly review improved the reliability of quarterly financial information. Earnings management is measured by current discretionary accruals. And we use the ERC to test the reliability of quarterly financial information. Additionally, we develop test models using the theoretical framework of Ohlson(1995). The results of this study are as follows; First, we find no evidence about voluntary quarterly review is related to the decreased earnings management. But the ERC of voluntarily quarterly reviewed samples are higher than that of the samples that are not reviewed by external auditor. The finding indicates that quarterly review increase the informativeness of quarterly financial information.

Keywords

• Quarterly Report
• Quarterly Review
• Current Discretionary Accrual
• Earnings Response Coefficient(ERC).

Related Articles

• The Effect of Dividend on Value Relevance of Future Earnings

  Jung, Hyun-Wook

  22(3) 39-68

  Abstract Full Text for PDF

• The Effect of Abnormal Audit Hours on Information Effect of Future Earnings

  Hyun－Uk Jung

  16(4) 9-34

  Abstract Full Text for PDF

• The Matching Principle and Price Informativeness

  KO YOUNG WOO

  16(1) 155-176

  Abstract Full Text for PDF

• The Accruals Quality and Earnings' Informativeness

  Lee, Se－Young

  10(4) 9-41

  Abstract Full Text for PDF

• Comparing the Usefulness of Accounting Information and the Difference of Earnings Management by Family Firms and Non－Family Firms

  Sanggyoo Shim , KimChangSoo , YoungpinHuh

  10(4) 173-202

  Abstract Full Text for PDF