The implications of accounting information in the Thai capital market

The dissertation examines the implication of accounting information and the earnings management practices in the Stock Exchange of Thailand in the following issues.; The first study examines the incremental information content of operating cash flows during 1994–1997. The results shows that earnings has incremental information content beyond cash flows in all three years, but cash flows provide incremental information content beyond earnings only in 1996. The study examines the effects of earnings and cash flows characteristics on the its information content, the findings indicates that earnings and cash flows permanence have a positive effect on the information content of earnings and operating cash flows. However, inconsistent with Cheng and Yang (2000), this study does not find significant negative cross effect of earnings and cash flows permanence on information content of cash flows from operations and earnings.; The second study investigates earnings manipulation practice in the Thai market. The study uses an accrual approach to examine the financial statements of the companies that had initial public offerings (IPO) during 1992 to 1995. The results provide evidence of income-increasing accruals in the year prior to, and during the year of the IPO. The study does not find a significant reversing trend of accruals in the years after the IPO. The results report that the firm's stock performance is not significantly different from the market during the first two years after the IPO, but underperformed the market in the third year.; The third study examines the relative value-relevance of performance measures including, earnings, revenue, operating, financing, and investing cash flows. The study compares the adjusted R2 and standardized regression coefficients of each performance measure. The results indicate that financing cash flows is the most value-relevance information during 1994–1997. Earnings are more relevant in 1995 and 1996 and lost its value relevance in 1997, the year of the economic crisis.; The three studies provide the understanding of the characteristics of the Thai market. The findings show the types of accounting information the investors use to price securities and the impact of information characteristics on the information content.