스톡옵션행사가 이익조정에 미치는 영향

This paper examines earnings management prior to stock option exercises. Because the gain realized from a stock option is dependent on the difference between the exercise price determined on the stock option grant date and the market price on the exercise date. Management has the incentive to temporarily encourage its share price immediately prior to the exercises date. We focus on earnings management to increase the market price prior to the stock option exercises. A sample of 49 Korea firms(KSE and KOSDAQ) with stock option exercises over the period 2002－2005 is examined for that purpose. Two types of control sample firms not engaged in stock option exercises are also chosen for comparison. The control firms are ① matched sample based on firm size, industry and year, and ② all firms in the STOCK MARKET and KOSDAQ MARKET. In order to test difference in earnings management between the treatment samples and the control samples, this study uses two methods. The first method is to compare NI(net income), CFO(cash flow from operations), TA(total accruals) and DA(discretionary accruals) using Yoon(2004) and the adjusted－Jones(1995) model between the two groups by using t－tests. The second method is to regress DA(TA) on a exercise dummy, firm size, debt ratio, cash flow from operations and negative earnings. We document that the exercises firms have higher NI, TA and DA than the control firms in the previous year. Also, the result of regression analysis shows that the exercise firms tend to increase reported earnings. This results imply that the exercise firms tend to manage their earning numbers in a positive(+) direction, which is consistent with our expectation. Our results support this hypothesis, as we find a positive relation between discretionary accruals and subsequent stock option exercises.