The employee bonus expensing is an important way to motivate employees in Taiwan’s high-tech industries. However, the business accounting law has been revised and the accounting principles will converge on the International Financial Reporting Standards (IFRS). The employee stock bonus will be changed as the basis of market price. This change in accounting treatment has greatly impacted on employees and enterprises.
Regarding the research periods, there are six years from 2005 to 2007 and the new system after the implementation from 2008 to 2010. This research employs descriptive statistics and panel data to analyze business operating performance, and the degree of earnings management after employee bonus expensing.
The research results show that after the employee bonus expensing the distribution of earnings might resolve the high-tech enterprises controversy for many years in Taiwan. However, the negative impacts on employees will be their real income decreasing and their motivation will be diminished. Consequently, this effect will also influence the enterprises how to keep their personnel and business performances. In addition, the management might increase the extent of earnings management after employee bonus expensing.
