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Kothari, S. P., A. J. Leone, and C. E. Wasley. 2005. “Performance Matched Discretionary Accrual Measures.” Journal of Accounting & Economics. 39 (1): 163-197.

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Article

Supply Chain Relationship, Earnings Management, and Operational Risks

1Department of Accounting, Feng Chia University, Taichung, Taiwan


Journal of Business and Management Sciences. 2022, Vol. 10 No. 3, 147-156
DOI: 10.12691/jbms-10-3-6
Copyright © 2022 Science and Education Publishing

Cite this paper:
Hui-Sung Kao, Ming-Jiun Tsai. Supply Chain Relationship, Earnings Management, and Operational Risks. Journal of Business and Management Sciences. 2022; 10(3):147-156. doi: 10.12691/jbms-10-3-6.

Correspondence to: Ming-Jiun  Tsai, Department of Accounting, Feng Chia University, Taichung, Taiwan. Email: pearly.cpb@msa.hinet.net

Abstract

This study discusses the effect of supplier-customer relationships in the supply chain on operational risk and takes into account earnings management to explain the increment and modulation effect on supply chain relationship and operational risk. With listed and over-the-counter (OTC) companies in Taiwan from 2009 to 2018 as subjects, this study finds in its empirical results that in supplier-customer relationships, suppliers may obtain related information in due time and adopt a better cooperation mode in the supply chain to reduce operational risk when they have a higher key customer concentration. However, in such a case, their operational risk may increase with a higher key customer concentration if enterprises take real earnings management to manipulate earnings.

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