Discussions

The results in firms of capital decrease are similar to those financial events, such as SEO and IPO. However, they are different concepts. After checking up the sample firms, there are fifteen firms make both capital decrease and SEO announcement at the same time.¹² Therefore, the effect of earnings management in capital decrease firms may be mixed up with SEO effect.

12 There are four firms make announcement of capital decrease for losses, two firms make treasury stock write-off. However, three firms do not illustrate the reasons. Six firms are not public offering any more.

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Appendix A：Calculation of Discretionary Accruals