재무유연성, 부채와 이익의 질

초록

Investigating the extant literature, the association between debt and the quality of earnings is reported as having conflicting results. The first viewpoint is that debt holders demand higher earnings quality information to assess the continued creditworthiness of borrowers, therefore debt has a positive influence on earnings quality. A contrasting viewpoint is that debt has a negative influence on earnings quality because when debt is relatively high, managers have strong incentives to make accounting choices and reporting decisions that reduce likelihood of possible debt covenant violations. Financial flexibility refers to as the degree of capacity and speed at which the firm can mobilize its financial resources in order to take reactive, preventive, and exploitive actions to maximize the firm value (Byoun 2011). Kim et. al (2015) report that financial flexibility is a significant determinant of debt financing in the post-financial crisis period in Korea. In this paper we primarily examine the association between debt and the quality of earnings, and scrutinize the impact of financial flexibility on the association between debt and the quality of earnings. Our findings are as follows. Contrary to the results by Ghosh and Moon (2010), earnings quality first decreases and then grows with increasing debt levels. And when financial flexibility is low, the higher debt levels increases the quality of earnings.

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