Supply Chain Relationship, Earnings Management, and Operational Risks

Hui-Sung Kao; Ming-Jiun Tsai

Journal of Business and Management Sciences. 2022, 10(3), 147-156
DOI: 10.12691/JBMS-10-3-6

Original Research

Supply Chain Relationship, Earnings Management, and Operational Risks

Hui-Sung Kao¹ and Ming-Jiun Tsai^1,

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

Pub. Date: July 21, 2022

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Cite this paper

Hui-Sung Kao and 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

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.

Keywords

supply chain management, key customer, operational risk, earnings management

Copyright

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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