Abstract

This study considers the situation of Morgan Stanley Capital International (MSCI) Taiwan Index adjustment announcement to examine the behavior of manager earnings management during the period 1999-2010. Survey whether the changes by declaring, in turn convey the manager’s use of discretionary accruals. It is to explore whether the manager earnings management degree is high (low) when firms deleted from (added to) MSCI Taiwan index. The empirical and analytical results show that the discretionary accrual changes degree of added firms is not significantly smaller than that of deleted firms and the result implies that there seems no information effect in MSCI Taiwan index adjustment announcement.

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