The purpose of this study is to investigate whether the implementation of International Financial Reporting Standard 15 (IFRS 15) in Taiwan will affect the use of discretionary accruals and real deals to manage earnings, and to examine the differences across industries.
This study uses the listed companies from 2015 to 2020 in the telecommunications industry, construction industry, manufacturing industry, biotechnology medical industry, and technology industry as our sample, and compares the discretionary accruals and real earnings management between the pre-IFRS 15 (2015-2017) and the post-IFRS 15 (2018-2020). This study finds that the discretional accruals and real earnings management do not be affected by the implementation of IFRS 15. When we carry out the regression analysis by each industry, the empirical results show that the discretionary accruals of the biotechnology medical industry and the manufacturing industry have decreased significantly, and discretionary accruals of the telecommunications industry has increased significantly. However, the construction industry has reduced the use of real earnings management. Therefore, it is inferred that after the implementation of IFRS 15 in Taiwan, the number of enterprises will change the methods to manage earnings.
