방위산업체의 이익조정과 지배구조 특성에 관한 연구

[Purpose]This study examines the effect of corporate governance characteristics within defense industries and governance on earnings management activities. [Methodology]This study analyzes and discusses the related theories, prior studies, and empirical results about earnings management in defense industries. Based on the investigation of existing theories and discussion, this study conducts multiple regression analyses by setting several hypotheses. [Findings]This study finds that companies with a higher level of dependence on defense business manage their earnings through real earnings management rather than accruals management. Also, this study reports that such effect is mitigated as the board of directors are more independent and active. In addition, this study finds that the presence of former bureaucrats among outside directors has a positive effect in reducing real earnings management. [Implications]This study clarifies underlying factors associated with opportunistic behaviors within defense industries. By considering both the level of discretionary accruals and real earnings management, this study expands the findings of prior studies. Also, this study contributes to the earnings management literature by utilizing unique data set that is not available in public.