2000 Fiscal Year Final Research Report Summary
Positive Research on Accounting Choices of Japanese Firms
| Project/Area Number |
11630150
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Accounting
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| Research Institution | KOBE UNIVERSITY |
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Principal Investigator |
TAKAYOSHI Okabe Kobe University Graduate School of Business, Administration, Professor, 経営学研究科, 教授 (60067676)
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| Project Period (FY) |
1999 – 2000
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| Keywords | Accounting choice / earnings management / discretion / transaction design / Japanese business / 会計報告 |
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| Research Abstract |
Accounting choices of the Japanese firms have some special features which are characterized by the Japanese business style. Japanese firms usually construct the long-term relationship with their business partners. Examples are the main bank system with lenders, the cross sharaholding with other companies, lifetime employment with laborers, and the keireteu dealing with customers or vendors. Those long-term relationship may influences the management decision in selecting accounting procedures because an stable accounting number are preferred by the business partners. Some characters of Japanese firms are empirically documented in this research project.
There are some special transaction designs which manage earnings number so that "good accounting number" be reported to the market. Department stores usually put off purchasing the commodities until they success to sale to their customers and keep out of inventory on their shops. This practice is called as syouka-shiire which means the purchasing-and-selling. Companies in the clothing industry often write a contract which permit the return of commodities if retailers failed to sell to consumers. Construction companies may write a subcontract which pass to another subcontractors and inflate the accounting number of sales. Those structuring of transaction are designed to manipulate reported accounting numbers.
This research project is aim to examine earnings management which are observed in the Japanese business world.
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