An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Lanfeng Kao
National University Of Kaohsiung

Abstract: This study examines the association between director’s share collateralization and earnings manipulation. The results indicate that directors’ share collateralization is significantly positive with earnings management and the positive association is stronger when the directors own more shares. Earnings management attributable to boards’ share collateralization causes severe agency problems and hurts firm performance. I find that earnings management attributable to share collateralization is negative related with firm performance.

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