Date of Award
8-20-2019
Degree Type
Thesis
Degree Name
Master of Philosophy (MPHIL)
Discipline
Business
Department
Computing and Decision Sciences
First Advisor
Prof. LIU Liming
Second Advisor
Prof. CHAN Koon Hung
Abstract
We examine the influence of customer’s inventory accruals on supplier’s accounting quality and earnings management practices. We consider two views of the role of customer’s inventory accruals play on their supplier and how they relate to their financial reporting. The first is the customer’s inventory accruals reflect supplier’s earnings management (i.e., intentional bias) as well as lead to difficulty in supplier’s earnings estimation (i.e., unintentional errors). The second view is based on supplier’s information advantage theory, which suggests suppliers are capable to interpret the information content of customer’s inventory accruals. In contrast to the information advantage view, we find that suppliers with higher level of customer’s inventory accruals have lower earnings quality and engage in more earnings management, evenafter controlling for their own inventory accruals level.
Language
English
Copyright
The copyright of this thesis is owned by its author. Any reproduction, adaptation, distribution or dissemination of this thesis without express authorization is strictly prohibited.
Recommended Citation
Fok, C. K. (2019). Customer's inventory accruals and supplier's earnings quality (Master's thesis, Lingnan University, Hong Kong). Retrieved from https://commons.ln.edu.hk/otd/53/