Corporate Governance Structure, Earnings Quality And Value Relevance

At present, the earning quality of listed company and the study on corporate governance attract more and more attention of theoretical and practical circles in and abroad. By the explosion of capital market, one important issue we face is how to find out the factors that affect the earnings quality and make recommendations on promoting the quality of listed companies combined with their own characteristics. All that can help investors make decisions more rationally and make the price of the stock reflects he earnings quality good or bad.This dissertation is divided into six chapters. The first chapter is Introduction introducing the background and significance, literature review and commentary, research contents, methods, techniques and major contribution of this article in the first chapter; the second chapter describes the value relevance of earnings, some basic theories of earnings quality and corporate governance structure as well as their relationship; the measurement research on earnings quality is described in the third chapter; the fourth chapter, the author carries out empirical study on the influence that corporate governance structure of Listed Companies exerts to earnings quality; the research of earnings quality-related is made in the fifth chapter; the last chapter makes the summary and recommendations of the whole paper. Specifically, mainly content and findings of this paper as the following:(1) At present, academic circles can not reach a consensus on the meaning of earnings quality, different scholars have different views and perspectives, and this inevitably leads different measurement methods on earnings quality. This paper studies earnings quality adopting the interpretation of earnings quality that proposed by Dechow and Dichev (2002) from the view of the matches of accounting earnings and cash flow, and using the modified DD model to measure and evaluate. Therefore, the paper considers the joint impact which earnings management and the changes of economic environment influence without pre-assuming accounting fundamentals neutrality.(2) Clarifying the relationship of corporate governance and earnings quality, and using empirical method to analyze how corporate governance influences on earnings quality. The study shows that there is significant positive correlation between earnings quality and ownership concentration, the proportion of social legal person shares and the institutional investors, holding two-level one, the number of board meetings and the proportion of directors and supervisors receiving no remuneration, and cash compensation of management. While other important factors in corporate governance do not pass the inspection. This might because of the method of this paper studying use, but it shows that there are some problems in the governance structure of listed companies to a certain degree in China.Moreover, the author does not find significant differences in results by the empirical study on the samples of high and low earnings quality.(3) Most empirical studies on the role that accounting earnings play in the capital market are to test the information that accounting earnings provide, while less to test the relationship between the quality of accounting earnings and stock price according to the existing literature. This paper is to find out the role the quality of earnings play to the capital market by researching the relativity of the quality of accounting earnings. This paper makes a certain changes to test the value relevance of earnings quality on the basis of modified Olsen valuation model. Through empirical analysis and robustness test, we can find that there is the significant positive correlation between earnings quality, EPS and stock prices, the surplus of earnings quality in the model variables makes the overall explanatory power of it increase. This shows that earnings quality has certain value relevance.(4) Finally, this paper makes suggestions on earnings quality evaluation from the view of corporate governance and stock-market supervision.