| With the integration of global financial markets, securities market regulators are moving toward unified accounting standards to make crossborder comparisons of financial statements less costly.; The objective of standards harmonization is subject to empirical examination. The first part of this dissertation set out to ascertain whether harmonization of standards could achieve equivalent usefulness, using Taiwan as the experimental setting.; There are advantages in using Taiwan. First, Taiwanese accounting and auditing standards generally follow the U.S. standards, and the U.S. Big Five auditing firms' Taiwanese affiliates audit listed companies. Second, the Taiwan Stock Exchange is assumed to be of semi-strong efficient. Third, Taiwanese family businesses and socio-economic settings differ from those of the U.S. and very few lawsuits have been filed against corporate management or auditors from shareholders in Taiwan.; My first finding is that the comparatively low measures of timeliness and conservatism for Taiwan are similar to that of the four Asian countries (Hong Kong, Malaysia, Singapore and Thailand) studied in Ball, Robin and Wu (2000) as opposed to higher measures of the common-law countries (Australia, Canada, U.K. and U.S.) studied in Ball, Kothari and Robin (2000).; My second finding suggests that the accounting earnings of high-family-ownership firms are more timely for bad news and more conservative for good news than those of low-family-ownership in Taiwan. Given that shareholders' litigation against managers or auditors is rare, one possible explanation for this observation is that high-family-ownership firms have a governance structure that more closely disciplines their managers so that the accounting standards are “properly” applied. I conjecture that the lack of a shareholder litigation infrastructure has a bigger effect on the “improper” application of GAAP.; As Ball, Robin and Wu conclude, “…‘Asian model’ in accounting…timely financial statement…is not part of it.” Users of those financial statements, and global investors in particular, might be fooled into thinking that disclosure from any country is of high quality when a one-world standard is applied. My results are consistent with these claims. |
