• The Journal of Asian Finance, Economics and Business
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• v.7 no.1
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• pp.59-69
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• 2020

This study investigates the influence of individual blockholder on accounting quality. Prior studies investigating Korean blockholders' influence focus on the influence of controlling shareholders or institutional investors; however, they rarely examine individual blockholders' influence. This paper investigates how individual blockholders in Korean stock markets affect accounting quality of firms listed in Korean Stock Exchange. I analyze individual blockholders' influence on proxies of accounting quality using multivariate regression with hand-collected individual blockholder data. Korean law requires public firms to disclose the list of shareholders having no less than 5% of ownership. From the list of blockholders, individuals who have no explicit personal relation with controlling shareholders were classified as individual blockholders. My empirical results show that firms having individual blockholder(s) use more income-decreasing accruals than those having no individual blockholder. Furthermore, accounting information of firms having individual blockholders(s) is more conservative than that of firms having no individual blockholders. However, the presence of individual blockholder increases the tendency of loss avoidance and earnings management using overproduction and reduction of discretionary expenditure. This paper contributes to the literature by presenting the first evidence of the monitoring role of an individual blockholder on financial reporting of firms listed in the Korean stock markets.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.16 no.2
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• pp.177-188
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• 2021

On December 2015, Financial Supervisory Service(FSS) announced the four key thematic audit review areas, one of them is an appropriation of unbilled revenue. Accounting of unbilled revenue is intertwined with a percentage of completion, that is concerned about discretionary decision by manager. Therefore, if manager motivated by income-increasing manipulation is exaggerating percentage of completion, unbilled revenue is excessively recognized. This problem is caused the serious accounting issues(e.g., shock at a loss for 2013 fiscal year by some construction firms, malpractice of accounting in order-made production industry). Distrust of accounting was grown because the shipbuilding and construction industries successively went poor management and bad accounting of them is revealed. Those accounting issues were the trigger for problem recognition of unbilled revenue, they were background for the designation of appropriation unbilled revenue as thematic audit review areas by FSS. Therefore, this study verified effectiveness of thematic audit review by empirically analyzing whether designation of thematic audit review makes the firm increases conservative behavior. Conservative accounting is estimated by using Basu(1997) model. We analyzed the effect of the thematic audit review on conservative accounting of unbilled revenue by comparing with reflecting unbilled revenue or not. The sample for test consists of firm-years the manufacturing and construction industries from 2012 to 2017. The test results of this study suggested that the conservative accounting of unbilled revenue after designation of the thematic audit review was significantly increased. We also tested again by classifying whether or not it is construction industry. We found that construction industry is more conservative than the other industry only for the designated year of the thematic audit review, otherwise there was not any evidence for significantly increasing conservatism. This study contributes to the literature by empirically analysing relationship of the unbilled revenue to the thematic audit review from the perspective of the conservatism and verifying effectiveness of the thematic audit review.

• Management & Information Systems Review
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• v.32 no.5
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• pp.261-285
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• 2013

In this paper, examined relationship between Earnings Management and Conservatism. For analysis of this purpose, we applied the Earnings Loss Avoidance Firms and Big-bath Firms. The results are as follows. First, conservative of Earnings Loss Avoidance Firms(sample I, II) is lower than the controlled companies. And Big-bath firms(sample III, IV) is higher than the controlled companies. This is a negative relationship between conservative and earning management. These results are consistent with previous research results. Second, When analyzing the Earnings Loss Avoidance Firms(sample I, II), Results are presented that conservative and earning management related to positive. These results reflect the company to Investors' demand for conservatism.

• Journal of Ocean Engineering and Technology
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• v.17 no.2
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• pp.34-39
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• 2003

Recent deepwater offshore structures in the Gulf of Mexico utilize butt welded tubular joints. Application of a welded tubular joint includes tendons, production risers, and steel catenary risers. Fatigue life assessment of these joints becomes more critical, as the structures to which they are attached are allowed to undergo cyclic and sometimes large displacements around an anchored position. Estimation of the fatigue behavior of these tubular members in the design stage is generally condrcted by using S-N curves, as specified in the codeds and standards. Applying the stress concentration factor of the welded structure to the S-N approach often results in a very conservative assessment, because the stress field acting on the tubular has a non-uniform distribution through the thickness. Fatigue life analysis using fracture mechanics has been applied in the design of the catenary risers. This technology enables the engineer to establish proper requirements on weld quality and inspection acceptance criteria to assure satisfactory structural integrity during its design life. It also provides guidance on proper design curves and a methodology for accounting for the effects of non-uniform stress distribution through the wall thickness. Still, there is inconsistency when designing tubular joints using a conventional S-N approach and when specifying weld flaw acceptance criteria using fracture mechanics approach. This study developed fatigue curves that are consistent with both the S-N approach and the fracture mechanics approach. Accounting for non-uniform stress distribution and threshold stress intensity factor were key parameters in relating both approaches. A series of S-N curves, generated from the fracture mechanics approach, were compared to the existing S-N curves. For flat plate butt joint, the S-N curve generated from fracture mechanics matches with the IIW class 100 curve when initial crack depth was 0.5 mm (0.02 ). The new curves for tubular joint agree very well with the experimental results. The comparison also indicated the degree of conservatism built into the API X design curve.

• International Journal of Ocean Engineering and Technology Speciallssue:Selected Papers
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• v.6 no.1
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• pp.69-74
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• 2003

Recent deepwater offshore structures in the Gulf of Mexico utilize butt welded tubular joints. Application of a welded tubular joint includes tendons, production risers, and steel catenary risers. Fatigue life assessment of these joints becomes more critical, as the structures to which they are attached are allowed to undergo cyclic and sometimes large displacements around an anchored position. Estimation of the fatigue behavior of these tubular members in the design stage is generally conducted by using S-N curves, as specified in the codes and standards. Applying the stress concentration factor of the welded structure to the S-N approach often results in a very conservative assessment, because the stress field acting on the tubular has a non-uniform distribution through the thickness. Fatigue life analysis using fracture mechanics has been applied in the design of the catenary risers. This technology enables the engineer to establish proper requirements on weld quality and inspection acceptance criteria to assure satisfactory structural integrity during its design life. It also provides guidance on proper design curves and a methodology for accounting for the effects of non-uniform stress distribution through the wall thickness. Still, there is inconsistency when designing tubular joints using a conventional S-N approach and when specifying weld flaw acceptance criteria using fracture mechanics approach. This study developed fatigue curves that are consistent with both the S-N approach and the fracture mechanics approach. Accounting for non-uniform stress distribution and threshold stress intensity factor were key parameters in relating both approaches. A series of S-N curves, generated from the fracture mechanics approach, were compared to the existing S-N curves. For flat plate butt joint, the S-N curve generated from fracture mechanics matches with the IIW class 100 curve when initial crack depth was 0.5 mm (0.02). The new curves for tubular joint agree very well with the experimental results. The comparison also indicated the degree of conservatism built into the API X design curve.

• Proceedings of the KWS Conference
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• 2002.10a
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• pp.127-132
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• 2002

Recent deepwater offshore structures in Gulf of Mexico utilize butt welded tubular joints. Application of welded tubular joint includes tendons, production risers, and steel catenary risers. Fatigue life assessment of these joints becomes more critical because the structures to which they are attached are allowed to undergo cyclic and sometimes large displacements around an anchored position. Estimating the fatigue behavior of these tubular members in the design stage is generally conducted by using S-N curves specified in the codes and standards. Applying the stress concentration factor of the welded structure to S-N approach often results in very conservative assessment because the stress field acting on the tubular has a non-uniform distribution through the thickness. Fracture mechanics and fitness for service (FFS) technology have been applied in the design of the catenary risers. This technology enables the engineer to establish proper requirements on weld quality and inspection acceptance criteria to assure satisfactory structural integrity during its design life. It also provides guidance on proper design curves to be used and a methodology for accounting for the effects of non-uniform stress distribution through the wall thickness. An attempt was made to develop set of S-N curves based on fracture mechanics approach by considering non-uniform stress distribution and a threshold stress intensity factor. Series of S-N curves generated from this approach were compared to the existing S-N curves. For flat plate butt joint, the S-N curve generated from fracture mechanics matches with the IIW class 100 curve when initial crack depth was 0.5 mm (0.02"). Similar comparison with API X′ was made for tubular joint.. These initial crack depths are larger than the limits of inspection by current Non-destructive examination (NDE) means, such as Automatic Ultrasonic Inspection (AUT). Thus a safe approach can be taken by specifying acceptance criteria that are close to limits of sizing capability of the selected NDE method. The comparison illustrates conservatism built into the S-N design curve.