The use of Accruals for Tax and Financial Reporting Purposes and Stock Market Response

Haeyoung Ryu,Jeehong Kim 한국회계정보학회 2013 한국회계정보학회 학술대회발표집 Vol.2013 No.1

This study investigates the effect of book tax conformity in Korea on the use of accruals. Specifically, we use a sample of 4,331 Korean firms and decompose their total accruals into book tax accruals and book only accruals. Book tax accruals are defined as accruals that affect both taxable income and reported earnings. Book only accruals are defined as accruals that affect solely reported earnings and have no effect on a firm’s taxable income. We anticipate that managers will decrease taxable income by recording book tax accruals that have relatively high book tax conformity to reduce their tax liability. Managers are expected to attempt to increase book income through book only accruals. We also examine the market response to the firms using these accruals in different directions. Our evidence demonstrates that firms are increasingly using income decreasing book tax accruals to decrease taxable income, and using book only accruals to increase financial income and compensate potential non tax cost such as financial reporting costs. In addition, our results show that the market correctly assess the management of accruals even when the uses of two accruals offset each other.

The Impact of COVID-19 on Earnings Management in the Distribution and Service Industries

Haeyoung RYU,Soo-Joon CHAE 한국유통과학회 2022 유통과학연구 Vol.20 No.4

Purpose: This study aimed to investigate whether distribution and service companies maintained their accounting information quality and provided reliable information despite the economic changes occurring after the outbreak of the COVID-19 pandemic in Korea. The distribution industry has enjoyed increased demand as many companies expanded their untact distribution channels, including to online sales. However, as the pandemic drags on, their future prospects remain uncertain. Research design, data, and methodology: In this study, we define 2018-2019 as the “pre COVID-19 period” and 2020 as the “post COVID-19 period.” An empirical analysis was performed using a regression model that includes POST, the independent variable, indicating the post COVID-19 period, and discretionary accruals (DA), a proxy for earnings management, as a dependent variable. Results: The analysis shows that the coefficient of POST is significantly positive (+) for the dependent variable DA. This finding suggests that distribution and service companies engaged in more earnings management during the post COVID-19 period than during the pre COVID-19 period, indicating their awareness of the uncertainty of future business performance as the pandemic persists. An additional analysis confirmed that smaller companies with fewer stakeholders and higher information asymmetry tend to engage more in earnings management than larger companies.

The Effects of Agents’ Competing Interests on Corporate Cash Policy and Cash Holdings Adjustment Speed: The Distribution and Service Industries*

Haeyoung RYU,Soo-Joon CHAE 한국유통과학회 2022 유통과학연구 Vol.20 No.3

Purpose: Controlling and minority shareholders sometimes have conflicting interests. Controlling shareholders who do not have adequate monitoring can exhibit a strong tendency to maximize their personal wealth. In this case, cash holdings can be the easiest means for them to pursue their personal interests. This study examined whether the largest shareholder’s ownership proportion affected the speed at which firms adjust their cash holdings to target levels in Korean distribution and service companies. Research design, data, and methodology: The study uses regression analysis to examine 834 firm-year samples listed on the KOSPI between 2013 and 2018 in the distribution and service sectors. Results: The largest shareholder’s ownership is positively related to a firm’s cash holdings adjustment speed. That is, the larger the largest shareholder’s ownership, the faster the firm adjusts its cash holdings to achieve the target level. Conclusions: This study contributes to the literature by providing evidence that the cash holdings adjustment speed in Korean service and distribution companies is affected by the largest shareholder’s ownership. As the agency problem between controlling and minority shareholders in Korea is a major issue, minority owners’ sensitivity to agency costs may help restrict controlling owners’ ability to maximize their personal wealth.

The Effect of Managerial Ownership on Stock Price Crash Risk in Distribution and Service Industries

RYU, Haeyoung,CHAE, Soo-Joon Korea Distribution Science Association 2021 유통과학연구 Vol.19 No.1

Purpose: This study is to investigate the effect of managerial ownership level in distribution and service companies on the stock price crash. The managerial ownership level affects the firm's information disclosure policy. If managers conceal or withholds business-related unfavorable factors over a long period, the firm's stock price is likely to plummet. In a similar vein, management's equity affects information opacity, and information asymmetry affects stock price collapse. Research design, data, and methodology: A regression analysis is conducted using the data on companies listed on the Korea Composite Stock Price Index (KOSPI) between 2012-2017 to examine the effect of the managerial ownership level on stock price crash risks. Results: Logistic and regression results indicate that the stock price crash risk was reduced as managerial ownership levels are increased. The managerial ownership level has a significant negative coefficient on stock price crash risk, negative conditional return skewness of firm-specific weekly return distribution, and asymmetric volatility between positive and negative price-to-earnings ratios. Conclusions: As the ownership and management align, the likeliness of withholding business-related information is reduced. This study's results imply that the stock price crash risk reduces as the managerial ownership level increases because shareholder and manager interests coincide, thereby reducing information asymmetry.

Analysis of Human Resource Status in Internal Accounting Control Systems in the Distribution and Service Industries

Haeyoung Ryu,Soo-Joon Chae 한국유통과학회 2020 유통과학연구 Vol.18 No.9

Purpose: We sought to investigate the operation status of internal accounting control systems in the distribution and service industries and verify whether investing in internal accounting personnel significantly influences the quality of the companies’ financial reporting. Research design, data and methodology: We identified descriptive statistics and performed a univariate analysis. Furthermore, a regression analysis verified the impact of investing in internal accounting personnel on the absolute value of discretionary accruals, a proxy for financial reporting quality. Results: Distribution and service companies allocated a significantly higher number of accountants to their internal accounting control systems than companies in other industries. We also confirmed that the absolute value of discretionary accruals significantly decreased as the average working experience of internal accounting personnel in distribution and service companies, in months, increased. Conclusions: In this study, we confirmed that distribution and service companies are devoting efforts to establishing internal accounting control systems and found that financial reporting quality is more effectively controlled as companies allocate more experienced personnel in their internal accounting control system.

The Role of Accounting Professionals and Stock Price Delay

RYU, Haeyoung,CHAE, Soo-Joon 한국유통과학회 2020 The Journal of Industrial Distribution & Business( Vol.11 No.12

Purpose: The stock price delay phenomenon refers to a phenomenon in which stock prices do not immediately reflect corporate information and the reflection is delayed. A prior study reported that the stock price delay phenomenon appears strongly when the quality of corporate information is low (Callen, Khan, & Lu, 2013). The purpose of the internal accounting control system is to improve the reliability of accounting information. Specifically, the more professionals such as certified public accountants are placed in the internal accounting control system, the more information is prevented from being distorted, so the occurrence of stock price delay will decrease. Research design, data and methodology: In this study, companies listed on the securities market from 2012 to 2016 were selected as a sample to analyze whether the stock price delay phenomenon is alleviated as accounting experts are assigned to the internal accounting control system. The internal control personnel data were collected in the "Internal Accounting Control System Operation Report" attached to the business report of each company of the Financial Supervisory Service's Electronic Disclosure System(DART). The measurement method of the stock price delay phenomenon was referred to the study of Hou and Moskowitz (2005). The final sample used in the study is 2,641 firm-years. Results: It was found that companies with certified accountants in the internal accounting control system alleviate the stock price delay phenomenon. This result can be interpreted as increasing the speed at which corporate information is reflected in the stock price by improving the reliability of information disclosed in the market by the placement of experts in the system. Conclusions: The results of this study suggest that accounting professionals assigned to the internal accounting control system are playing a positive role in providing high-quality information to the market. In this study, focusing on the fact that the speed at which corporate information is reflected in the stock price is very important for the stakeholders in the capital market, we find that having a certified public accountant in the internal accounting control system alleviates the stock price delay phenomenon.

The Effects of Agents' Competing Interests on Corporate Cash Policy and Cash Holdings Adjustment Speed: The Distribution and Service Industries

RYU, Haeyoung,CHAE, Soo-Joon Korea Distribution Science Association 2022 유통과학연구 Vol.20 No.3

Purpose: Controlling and minority shareholders sometimes have conflicting interests. Controlling shareholders who do not have adequate monitoring can exhibit a strong tendency to maximize their personal wealth. In this case, cash holdings can be the easiest means for them to pursue their personal interests. This study examined whether the largest shareholder's ownership proportion affected the speed at which firms adjust their cash holdings to target levels in Korean distribution and service companies. Research design, data, and methodology: The study uses regression analysis to examine 834 firm-year samples listed on the KOSPI between 2013 and 2018 in the distribution and service sectors. Results: The largest shareholder's ownership is positively related to a firm's cash holdings adjustment speed. That is, the larger the largest shareholder's ownership, the faster the firm adjusts its cash holdings to achieve the target level. Conclusions: This study contributes to the literature by providing evidence that the cash holdings adjustment speed in Korean service and distribution companies is affected by the largest shareholder's ownership. As the agency problem between controlling and minority shareholders in Korea is a major issue, minority owners' sensitivity to agency costs may help restrict controlling owners' ability to maximize their personal wealth.

The Effect of Business Strategy on Stock Price Crash Risk

RYU, Haeyoung 한국유통과학회 2021 The Journal of Industrial Distribution & Business( Vol.12 No.3

Purpose: This study attempted to examine the risk of stock price plunge according to the firm's management strategy. Prospector firms value innovation and have high uncertainties due to rapid growth. There is a possibility of lowering the quality of financial reporting in order to meet market expectations while withstanding the uncertainty of the results. In addition, managers of prospector firms enter into compensation contracts based on stock prices, thus creating an incentive to withhold negative information disclosure to the market. Prospector firms' information opacity and delays in disclosure of negative information are likely to cause a sharp decline in share prices in the future. Research design, data and methodology: This study performed logistic analysis of KOSPI listed firms from 2014 to 2017. The independent variable is the strategic index, and is calculated by considering the six characteristics (R&D investment, efficiency, growth potential, marketing, organizational stability, capital intensity) of the firm. The higher the total score, the more it is a firm that takes a prospector strategy, and the lower the total score, the more it is a firm that pursues a defender strategy. In the case of the dependent variable, a value of 1 was assigned when there was a week that experienced a sharp decline in stock prices, and 0 when it was not. Results: It was found that the more firms adopting the prospector strategy, the higher the risk of a sharp decline in the stock price. This is interpreted as the reason that firms pursuing a prospector strategy do not disclose negative information by being conscious of market investors while carrying out venture projects. In other words, compensation contracts based on uncertainty in the outcome of prospector firms and stock prices increase the opacity of information and are likely to cause a sharp decline in share prices. Conclusions: This study's analysis of the impact of management strategy on the stock price plunge suggests that investors need to consider the strategy that firms take in allocating resources. Firms need to be cautious in examining the impact of a particular strategy on the capital markets and implementing that strategy.

중심성의 이동 : 치매 환자 가족의 돌봄 경험에 대한 질적 합성 접근

유영미(Ryu, Young Mi),유미(Yu, Mi),오세은(Oh, Seieun),이해영(Lee, Haeyoung),김해진(Kim, Haejin) 한국간호과학회 2018 Journal of Korean Academy of Nursing Vol.48 No.5

Purpose: This study aimed to synthesize the caring experiences of Korean family members of patients with dementia through a qualitative meta-synthesis method. Methods: By searching through nine Korean and English databases, we compared 37 qualitative studies on caring experiences of family members of patients with dementia. The selected studies were synthesized through meta-synthesis, proposed by Sandelowski and Barroso (2007). Results: The meta-synthesis elicited four themes: tough life due to care for patients, changes in relationships, adaptation to caregiver’s roles, and new perspectives of life through personal growth. Caregivers were shocked when a sudden diagnosis of dementia was made prior to any preparation on their part. They were tied to their patients all the time and their mind and body got exhausted. Their relationship with patients began to change and they looked at them differently. They experienced conflicts with the other non-caring family members and were alienated from them. They were also socially isolated. However, by building their own care strategies and utilizing social resources, they gradually adapted to their caregiver roles. Finally, they experienced personal growth and acquired a new perspective toward life by accepting their roles and finding meaning in their lives. Shifting the caregiver’s centricity from themselves to the patient was the process of becoming human beings who actively constructed their realities while giving meaning to their painful lives and interacting with the environment. Conclusion: The results of the study can be useful for nurses in understanding the experiences of caregivers of the patients with dementia and in providing them with practical interventions.

추진제어용 전력변환장치의 소음시험 방법에 관한 고찰

류준형(Joonhyoung Ryu),배창한(Changhan Bae),백광선(Kwangsun Baik),이강원(Kangwon Lee),김재원(Jaewon Kim),지해영(Haeyoung Ji) 한국철도학회 2014 한국철도학회 학술발표대회논문집 Vol.2014 No.10

철도차량에는 역행과 제동을 위하여 추진제어용 전력변환장치와 견인전동기로 구성되는 추진제어장치가 설치되어 있는데, 제어특성에 따라 특유의 스위칭 소음이 발생된다. 국내에서 운영되는 철도차량의 추진제어장치는 관련법령에 따라 소음기준에 적합하도록 제작되어야 하는데, 추진제어용 전력변환장치의 소음시험은 구성품 단계에서 견인전동기와 조합하여 운전상태를 변화시키며 발생소음이 최대인 운전상태에서 측정한다. 소음수준은 운전조건과 부하조건 등에 따라 달라지며, 측정위치에 대해서도 영향을 받는다. 본 논문에서는 운전조건에 따른 추진제어용 전력변환장치의 소음수준 변화와 주파수분석을 통하여 견인전동기 속도에 따른 주파수 분포 추이를 분석한다. In the rolling stock, there is a propulsion control unit which is consisted of traction converter and traction motor for powering and braking. It makes the typical switching noise according to the control characteristics. The propulsion control unit installed in domestic rolling stock should be suitable for related regulation. The noise test for traction converter is performed in sub-system phase which is combined to the traction motor and operated with variable powering command. The noise test results are obtained entire speed range operation from maximum equivalent noise level. The equivalent noise level is changed according to the operation mode, load condition and position of the test. This paper analyzes the variation of equivalent noise level and noise spectrum according to the operating condition.