재량적 발생액의 신용평점 및 재무평점 관련성 = Discretionary Accruals` Relation to Credit Score and Financial Score

다국어 초록 (Multilingual Abstract)

As the improvement of credit-rating systems is discussed across nations, this study analyzes whether the firm`s discretionary accruals are related to the credit and financial scores by credit rating agencies. The credit score is firm`s financial ratings from 1 to 10 scales which reflect firm`s asset size and consecutive financial period for the five industrial groups, determined in a manner to combine the models of bankruptcy prediction and financial scores. On the other hand, financial score ranges from 1 to 100 scores which reflect firm`s solvency, profitability, cash flow, growth, and activity, determined in an manner to utilize the financial score model by rating and weighting the factors of bankruptcy. This study investigates whether management considers the credit and financial scores into financial reporting by means of increasing or decreasing the discretionary accruals. To complement the limits of previous research, this study analyzes whether management increase (or decrease) discretionary accruals when the credit and financial scores are dropped (or improved) from last year`s scores. The results show that the drop of the credit and financial scores from last year`s scores is positively related to the management`s discretionary accruals, while the improvement of the credit and financial scores from last year`s scores is negatively related to the management`s discretionary accruals. These relations are confirmed in the various measurement models of discretionary accruals. This finding suggests that firms react to the changes in the credit and financial scores by increasing (or decreasing) the discretionary accruals. Despite the relatively delayed announcement of the dropped scores, compared to the improved scores, by credit rating agencies, the findings support the earnings` management to cope with the changes in the credit and financial scores.