개별발생액접근법을 통한 은행의 이익관리연구

The study examines the opportunistic accounting choice for loan loss provisions by Korean banks during the period from 1995 to 2001.Bank managers are concerned with reported earnings and the associated balance sheet numbers because investors, creditors and other stakeholders rely on reported financial statement numbers to make economic decisions. I investigate whether banks with poor (or good) performance adjust loan loss provisions to manage earnings. For example, banks with low (or high) levels of nondiscretionary current earnings are expected to decrease (or increase) loan loss provisions. Nondiscretionary current earnings, which are defined as net income before discretionary accruals, exhibit a significant positive relation with loan loss provisions. This result is consistent with the earnings management hypothesis where banks smooth earnings over time. The loan loss provisions of banks could have changed over time in response to a shift in business from, say, industrial loans to consumer loans or other loans. The results reveal that industrial loans have a significantly positive relationship with loan loss provisions, while consumer loans have not. Additionally, I investigate whether the managers' use of loan loss provisions to signal private information about a future bank's capability to absorb the reduction in earnings. If signaling is an important incentive in choosing loan loss provisions, then I should observe a positive relation between loan loss provisions and changes in nondiscretionary current earnings. The results reveal that loan loss provisions signal good news about future prospects. This study is expected to contribute to enriching the literature on bank loan loss provisions in terms of the methodology and providing policy implications for bank regulatory agencies.