• Journal of Digital Convergence
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• v.15 no.1
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• pp.77-84
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• 2017

This study investigates the association between financial reporting strategy and the directors' and officers' liability insurance. Since D&O insurance protects officers and directors against the risks of shareholder litigation, it is possible that, because of moral hazard, managers will be more willing to participate in opportunistic financial reporting such as earnings manipulation when they are covered by a generous D&O insurance policy. This paper examines the association between D&O insurance and financial reporting, specifically whether the purchase of D&O insurance affects earnings manipulation. On the other side, the firms engage earnings management are willing to purchase D&O insurance, this study tests whether earnings manipulation affects D&O purchases using listed firms in Korean stock market from 2006 to 2008. This paper finds that firms with higher discretionary accruals are less likely to purchase D&O insurance implies that managers who are participating in earnings manipulation are not willing to purchase D&O insurance. The relation between discretionary accruals and D&O is significantly negative which indicate D&O insurance purchase does not trigger earnings manipulation rather it alleviates opportunistic reporting behavior.

• Proceedings of the Korea Contents Association Conference
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• 2017.05a
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• pp.169-170
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• 2017

우리나라의 이사의 책임은 엄격하다. 따라서 이사가 막대한 손해배상책임에 직면하게 될 수도 있다는 불안감 때문에 이사 취임을 꺼리게 된다. 그로 인하여 회사는 유능한 경영인 영입에 어려움이 따르고 이사의 경영활동이 위축될 수 있다. 이러한 문제를 해결하기 위해서는 이사의 책임을 완화시킬 수 있는 독일의 입법례처럼 경영판단의 원칙을 법제화할 필요가 있으며 임원배상책임보험을 활성화 하여야 한다.