Related party transactions and income smoothing: new evidence from Korea
- Authors
- Shin, Il Hang; Sohn, Sung Kyu; Park, Sorah
- Issue Date
- Mar-2021
- Publisher
- ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
- Keywords
- earnings informativeness; Income smoothing; non-operating RPT; operating RPT; related party transaction
- Citation
- Asia-Pacific Journal of Accounting and Economics, v.28, no.2, pp.263 - 280
- Journal Title
- Asia-Pacific Journal of Accounting and Economics
- Volume
- 28
- Number
- 2
- Start Page
- 263
- End Page
- 280
- URI
- https://scholarworks.bwise.kr/gachon/handle/2020.sw.gachon/2087
- DOI
- 10.1080/16081625.2019.1566011
- ISSN
- 1608-1625
- Abstract
- We examine the relationship between related party transactions (hereafter, RPTs) and income smoothing using a sample of Korean firms from 2001 to 2013. We hypothesize that RPTs can be an efficient tool for income smoothing activity because both controlling shareholders and managers related to the execution of RPTs have incentives for income smoothing. Consistent with our conjecture, we find that RPTs are significantly associated with income smoothing. In particular, operating RPTs are shown to be an efficient tool to achieve smooth earnings path. We further document that income smoothing based on RPTs improves the informativeness of firms’ reported earnings about their future earnings, which is measured by future earnings response coefficients (FERC). © 2019, © 2019 City University of Hong Kong and National Taiwan University.
- Files in This Item
- There are no files associated with this item.
- Appears in
Collections - 경영대학 > 경영학부(글로벌경영학) > 1. Journal Articles
![qrcode](https://api.qrserver.com/v1/create-qr-code/?size=55x55&data=https://scholarworks.bwise.kr/gachon/handle/2020.sw.gachon/2087)
Items in ScholarWorks are protected by copyright, with all rights reserved, unless otherwise indicated.