本論文檢驗多角化對盈餘管理的影響。而先前研究指出會計品質受整體制度性因素所影響，包括國家司法系統、會計準則及股權結構等所影響。因此，本論文不僅檢驗多角化及兩個重要的制度性因素－投資者保護與IFRS採用－個別對盈餘管理的影響，我們也檢驗了投資者保護/IFRS採用是否影響多角化公司的盈餘管理。我們的結果顯示多角化及投資者保護可以減低盈餘管理。我們的進一步研究指出外部投資者權利及IFRS採用能進一步減低多角化公司的盈餘管理。我們推論外部投資者權利與IFRS採用可以使投資者注意交叉補貼問題並因而詳細檢視部門別財務資訊。股東們的此一行為將有效地抑制經理人管理盈餘的動機。一旦每一部門的裁決性應計數降低而各部門應計數互相抵消的效果仍存在，則裁決性應計數將比只有部門應計數相消效果存在時還來得低。額外的測試提供支持我們推論所需的先決條件的證據。

This paper examines the diversification effect on earnings management. Prior studies suggest that accounting quality is a function of overall institutional settings, including the legal system of the country, accounting standards, ownership structure, etc. Thus, not only checking individual effects of diversification and two important institutional settings: investor protection and IFRS adoption on earnings management, we also examine whether investor protection/IFRS adoption could affect earnings management of diversified firms. Our results show that diversification and investor protection could mitigate earnings management. Our further studies provide evidence that outside investor rights and IFRS adoption further reduce earnings management of diversified firms. We infer that outside investor right and IFRS adoption could lead shareholders to watch out for the cross-subsidization problem and scrutinize segment financial information. This behavior of shareholders will effectively limit the incentive of managers to manage earnings. Once discretionary accruals of each segment decrease while the cancellation effect of accruals remains, the level of discretionary accrual will even lower than that would be if only cancellation effect of segment accruals exist. Additional test provides some evidences of prerequisite for our inference.

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