• Journal of the Korea Convergence Society
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• v.9 no.2
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• pp.207-215
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• 2018

In this study, targeting KOSPI and KOSDAQ listed companies, the relationship between the abnormal investment of companies and analyst earnings forecasts was empirically analyzed. The analysis period of this study spanned from 2003 to 2015 (with that of dependent variables spanning from 2004 to 2016) based on the variables of interest, and among the companies whose earnings per share forecasts were announced by financial analysts, the final sample of 4,917 companies/year that meets the research condition was selected as the target analysis. The results of the empirical analysis are as follows. First, it turned out that the more total abnormal investment, abnormal R&D and abnormal CAPEX investment, the more accurate were analyst earnings forecasts. Second, the more total abnormal investment, abnormal R&D, abnormal CAPEX investment, the more pessimistic analyst earnings forecasts tended to be. Further analysis has shown that these results came more from over investment groups than under investment groups. The results of this study are expected to make additional contributions to the existing studies in that the abnormal investment is considered as a determinant of analyst earnings forecasts.

• Journal of Digital Convergence
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• v.19 no.11
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• pp.113-119
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• 2021

This study compared business performance and earnings quality before and after the COVID-19 pandemic for information and communication companies whose sales increased due to the impact of the COVID-19 pandemic. For this, 4 indicators of ROA, growth potential, liquidity, and stability are used for business performance, and for earnings quality, the standard deviation of the residuals measured by the Dechow and Dichev(2002) model and Francis et al.(2005) model was used. As a result of the analysis, ROA, a representative business performance indicator, increased after xthe period compared to the period before the pandemic, but liquidity was rather deteriorated. As for the quality of earnings, it was confirmed that earnings sustainability is maintained in the post-pandemic period compared to the previous period, similar to ROA. Overall, the profit level and earnings quality of information and communications companies seemed to be improving, while liquidity was deteriorating. This confirms that companies that have overcome the immediate crisis are not ready to pay off their debts right away. Therefore, it suggests that companies need restructuring to reduce their increased debt from the time the COVID-19 subsides.

• Asia-Pacific Journal of Business
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• v.13 no.1
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• pp.103-123
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• 2022

Purpose - This study investigates the effects of earnings management, related party transactions between chaebol affiliates on earnings management and ESG score on their profitability using return on assets (ROA). Design/Methodology/Approach - We use data including ESG (Environmental, Social, and Corporate Governance) score of the Korea Corporate Governance Service(KCGS), and financial data of 10,145 firm-year observations from the Total Solution 2000 (TS 2000) and Korea Companies-Information Service (KOKOInfo), and apply the finite lagged models to investigate the long-term effects of related party transactions between chaebol affiliates of earnings management on ESG scores and corporate performance. Furthermore, to take into consideration the simultaneous mutual effects on each other of main variables, we introduce finite distributed lags of five years. Findings - First, ESG-rated firms have a higher total asset return than non-ESG-rated firms. Second, chaebol firms have a higher profitability than non-chaebol firms. Third, profit management of related party transactions between affiliates within a chaebol has a positive effect on the short-term profitability and a negative effect on the long-term profitability. Fourth, chaebol ESG firms have a lower impact on profitability due to rating up (down) than non-chaebol ESG firms. Research Implications or Originality - Based on the above results, it can be concluded that firms used related party transactions for earnings management, the effects of related party transactions change over time, and chaebol firms manipulate earnings through related party transactions and ESG scores.

• Journal of Labour Economics
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• v.26 no.2
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• pp.97-127
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• 2003

The purpose of this paper is to analyze the expected earnings differentials by major of university graduates. Usually the achievement in labor market has been measured by the earnings of those being with job. But such simple comparisons of earnings might fail to bring out correct evaluation once if the probabilities of getting a job are quite different across the major of university graduates. So it is necessary to compare the expected lifetime eatings which can be computed using the earnings of those with job and the probabilities of taking a job. In this paper, we showed that the expected earings of university graduates are quite different by major and not only the difference of earnings but also the difference of job-taking probabilities are considerably contributing such differentials. Especially the expected earnings of medicine and education are considerably higher than those of other majors. These results are maintained almost identically with the change of estimation methods. But despite of these findings. it should be admitted that it was not possible to exactly measure the magnitude of differentials by major.

• Journal of Digital Convergence
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• v.12 no.11
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• pp.99-112
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• 2014

This study the impact on the real earnings management credit rating (RANK), and looked at the impact on the real earnings management grade credit rating changes (decrease, increase) the effects in detail. firm for a total of 06 years for firm that are listed on the Korea Stock Exchange from 2008 to 2013 for the hypothesis - using the proceeds of the year 2,583 sample were analyzed to study. A regression analysis of the relevance of the credit rating (RANK) and real earnings measured results between the credit rating and a measure of real earnings management ACFO and ADE (+) between AMC (-) IFRS and receive relevant ADE between(+) between AMC (-) if the credit rating (RANK) is increased ACFO and is significantly sound level at 1% showed the relevance of (+) did not significantly ADE (+) 10% of AMC if the credit rating fell ACFO is (-) from AMC show the relevance of positive credit rating is dropped capital letter showed for performing real earnings management of positive even give up the future cash flow in order to reduce the cost.

• Journal of Industrial Convergence
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• v.20 no.12
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• pp.59-70
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• 2022

This study investigates the sensitivity reflected in the accounting earnings differs according to the difference in the characteristics of accounting information such as profit and loss for the same market information. For this, market information and accounting data were analyzed for 11,462 non-financial listed companies listed on the KOSPI and KOSDAQ markets from 2012 to 2020 by using Basu's measurement of conditional conservatism and Ball and Shivakumar's measurement of conservatism. Accounting earnings sensitivity was analyzed according to the combination of information. As a result of the study, it was confirmed that both earnings and losses corporates recognize losses with delay, while losses are recognized quickly by loss corporates and delayed recognition by earnings companies. It was confirmed that more strict conservatism was applied to the losses corporates compared to the earnings corporates by delaying the recognition of earnings while the early recognition of the losses. It provides empirical data on the causality between the asymmetric timeliness and the combined effect of market information and accounting information by verifying that the losses corporates responds sensitively to market information while the earnings corporates does not react sensitively to the market information.

• Korean Journal of Social Welfare
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• v.41
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• pp.43-67
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• 2000

The main source in financing the National Pension benefits is the contribution raised from the insured's earnings. So, Most of the insured take a great interest in the questions of what return on the payment of contribution National Pension benefits provide and whether there be the difference in return according to earnings level. The Purpose of this study is to assess money's worth of National Pension and to answer the above questions. There are two basic types of money worth analysis, empirical and hopothetical. This study basically belongs to the former in terms that it is based on actual earnings and insured term. For performing money's worth analysis, four different measures which are referred as the "break-even period", the "benefit/tax ratio", the "net lifetime transfer", the "internal rate of return" are used and they all involve the way in which the relationship between the present value of contributions and the present values of benefit is present. The results which evaluate average money's worth of accrued rights before 1999 are le as follows. Break-even period is about 43 months, benefit/tax ratio being 4.9, net lifetime transfers being about 37 mil1ion won, internal rate of return being 33.2%. This verifies that money' worth of National Pension is much higher than actuarially fair. In the mean while, money' worth is proved to be very different according to earnings level. The progressivity relationship between earnings level and rate of return is found in all measures but net lifetime transfer.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.1
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• pp.81-90
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• 2020

We examine the effects of the complexity of tax-related information on the issuance of analyst's pre-tax income forecast and its value relevance. If analysts respond adequately to the needs of investors, they are more likely to provide a pre-tax income forecast. The provision of a pre-tax income forecast may indicate analysts' confidence in assessing the quality of earnings. Thus, investors, in turn, would be more confident in the analysts' pre-tax income forecasts if analysts provide both pre-tax and earnings forecasts than only the latter. Using a sample of Korean listed companies for 2005-2014, we find that analysts are likely to provide an implicit tax forecast when the volatility of the effective tax rate is low and the book-tax differences are small. We also find that when analysts provide pre-tax and after tax income forecasts, the value relevance for unexpected earnings increases. These results indicate that analysts are likely to be interested in corporate tax information and the complexity of tax-related information affects the availability of implicit tax forecasts. Furthermore, this study provides empirical evidence that when analysts provide both pre-tax and after tax income forecasts, investors have more confidence in analysts' earnings forecasts, which results in greater investors' responses.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.5
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• pp.31-40
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• 2020

This study investigates whether other comprehensive income (OCI) reported in the statement of comprehensive income (one of the main financial statements after the adoption of K-IFRS) predicts a firm's future performance. Using the quarterly data of Korean listed companies, we examine the association between OCI estimates and future earnings. First of all, we find that OCI is positively associated with earnings in both 1- and 2-quarter ahead, supporting the predictive value of OCI. When we break down OCI into its individual components, our results suggest that the net unrealized gains/losses on available-for-sale (AFS) investment securities are positively associated with future earnings, while the other components (e.g., net unrealized gains/losses on valuation of cash flow hedge derivatives) present insignificant results. In addition, we investigate whether the reliability in OCI estimates enhances the predictive value of OCI to predict future performance. We find that the predictive ability of OCI, in particular the net unrealized gains/losses on available-for-sale (AFS) investment securities, becomes more pronounced when firms are audited by the Big 4 audit firms. Overall, our study suggests that information content embedded in OCI can provide decision-useful information that is helpful for the prediction of future firm performance.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.8
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• pp.233-246
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• 2020

This paper investigates the effect of the involvement of the board chairman in the audit committee (AC) on earnings management (EM). It examines Bursa Malaysia-listed companies with the lowest positive earnings for the years 2013 to 2015. The Modified Jones Model by Kasznik (1999) was used to determine discretionary accruals. An AC that includes its board chairman as an ordinary member is associated with greater discretionary accruals. However, a board chairman who is also the chairman of the AC does not seem to influence discretionary accruals. This paper supports the agency theory and policy-makers' efforts to prevent board chairmen from sitting on ACs. It is the first study that uses the agency theory to describe the association between the board chairman's involvement in the both AC and EM. This study alerts policy-makers, stakeholders and researchers to the influence of a board chairman serving on the AC in curbing EM. Furthermore, it provides empirical evidence that the majority of Malaysian companies whose board chairmen are involved in the AC appoint the chairman as an ordinary member of the AC. This indicates that executive directors may affect such actions. Hence, more policies are needed to improve AC independence.