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Korean Journal of Financial Studies 2009;38(3):371-391.
Published online September 30, 2009.
Credit Rating, Accounting Accruals and Conservatism
Byoung Ho Kim
신용평가등급과 발생액 및 보수주의 이익 인식과의 관련성에 대한 실증적 연구
This paper tests whether firms which have credit ratings with a plus(+) or minus(-) sign added have more incentive to increase reported earnings in order to get benefit from an upgrade to a higher broad rating category, or not to lose benefit from a downgrade to a lower category. This paper compares the magnitude of accounting accruals and the degree of earnings conservatism for firms with a plus or a minus credit rating sign with those of firms with no sign attached to their credit ratings. The test sample includes non-financial firms listed on Korea Stock Exchange that have bond credit ratings from KIS(Korea Information Service, Inc), KR(Korea Rating, Inc) or NICE(National Information and Credit Evaluation, Inc). The empirical test results indicate higher earnings accruals for firms with a plus or minus rating sign, but mixed results are found in the earnings conservatism test.
Key Words: 발생액,신용평가기관,신용평가등급,이익 조정,회계학적 보수주의,Accounting Accruals,Credit Rating,Credit Rating Agencies,Earnings Conservatism,Earnings Management
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