주요 고객사의 원가 관리와 공급사의 이익 품질 간 관계

This paper investigates the impacts of major customers’ cost management on a firm’s earnings quality. Major customers who generate more than 10% of a firm’s total sales have a substantial influence on the firm’s business in various aspects through slanted bargaining power. Using U.S. firms’ disclosure about the identification of major customers, we find that a firm’s earnings management measured by discretionary accruals is positively associated with the degree of cost management of its major customers and that the positive association is pronounced when the supply chain relationship is long-lasting. Also, we test whether the major customers’ cost management puts pressure on the firm’s performance and find that the degree of cost management by major customers is negatively associated with the firm’s sales, gross margin, and profit margin. Overall, our findings suggest that, as major customers demand greater price-cuts, the firms experience poorer performance and have stronger incentives to make upward adjustment of earnings. In additional tests, we validate the measure for cost management by showing that, while a firm’s sales and its major customers sales are closely related when the customers do not exhibit extreme cost management, the relationship disappears when major customers manage their costs to a large extent. Also, we find that the main findings remain consistent when we use alternative measures for earnings quality and major customers’ cost management. In sum, our results suggest that inter-firm dynamics can have a significant effect on the usefulness of financial reporting quality of a firm