적자회피 자산처분손익과 자본시장 반응

This study investigates firms’ Real Earnings Management from 2004 to 2010 based on Interest Coverage Ratio, a basic standard in identifying potentially insolvent enterprises on the stock market, and how the capital market responds to the action. First, It is investigated that whether Earnings Management through gain on deposition of assets, discretionaries in non－operating profit and loss accounts, is performed by the firms reporting net profit current year with less than Interest Coverage Ratio 1.0. Second, we examine capital market's responds to firms’ Real Earnings Management by employing Cumulative Average Residual(CAR) as a proxy variable. The result of this study is as follows. First, it is revealed that firms reporting net profit current year reporting with less than Interest Coverage Ratio 1.0 increase their profits by manipulating discretionary accounts belonging to non－operating revenue, such as investment assets, tangible assets, and gain on disposal of marketable securities. Second, the firms reporting net profit during the current year with less than Interest Coverage ratio 1.0 based on gain on disposition of investment show negative relation with Cumulative Average Residual(CAR) at the 0.1 significance level, which means players in the capital market take a negative response to the Earning Management through gain on disposition of investment. This study has some contributions as follows. This study presented the authorities and regulatory financial institutions with the need of paying attention to the firms that try to increase their Interest Coverage Ratio by using Real Earnings Management.