The Research On Relationship Of Chinese Listed Company Corporate Governance And Earnings Management

The increasing effects of earnings management on the capital market and investors'interest is becoming one of the current focuses of research in the field of accounting. There seems to be the natural relationship between the information of accounting earning and corporate governance. On one hand, the basis of earnings management, which called "principal-agent theory", is also the basis of corporate governance. On the other hand, corporate governance as an institutional arrangement which norms the relations between the powers and responsibilities of stakeholders interest, create an effective management of surplus constraints. Therefore, this paper attempts to analysis the impact which corporate governance affects earnings management that based on the corporate governance.This paper chooses normative and positive research method. Firstly, the thesis limits the connotation of earnings management and corporate governance clearly, and does a systematic summaries and combing on theories of them. Then, the thesis adopts normative research method to analysis the effect of external and internal governance structure on earnings management respectively. And the positive research of this thesis includes two parts:measuring the level of earnings management and the positive research on the effect of corporate governance structure on earnings management. In the first part, this paper uses cross-sectional expanding Jones model to do regression analysis respectively according to the financial data of each industry. In the second part, this paper considers three aspects of the corporate governance structure including ownership structure, boards of directors and board of supervisors and put forward ten theory hypotheses about the relationship between earnings management and corporate governance structure based on the normative analysis. Moreover, this paper picks 1275 A-share of Chinese stocks market including Shanghai and Shenzhen in 2009 as a research sample and uses OLS multi-linear regression analysis to prove those theory hypotheses.At last, the thesis draws some conclusions by empirical study. (1) There is nothing correlated between earnings management and the ratio of the state shares, the ratio of invest institution shares, the ratio of share balance,the scales of boards of directors,frequency of the meetings of independent directors, the proportion of independent directors, scales of boards of supervisors and frequency of meetings of boards of supervisors. (2) The relationship between the shareholding ratio of the first shareholder and earnings management takes on the shape of "U". (3) The level of earnings management is much lower when the general manager and the board chairman is the same man.The contributions of paper are mentioned as follow. Firstly, based on a clear definition of corporate governance and earnings management, the paper describes the close relationship between earnings management, points out that the company management to the earnings management's crucial role, provides the reference to the effective control of earnings management of listed companies. Secondly, the data of 2009 is firstly used among the previous researches, which forms the basis.Based on that, the paper shows the relationship between the corporate governance and earnings management. Thirdly, among the conclusions of analysis, the paper analyzes the relationship between the corporate governance and earnings management under the circumstance of "whole circulation", and provides the specific suggestions to the issue. This view has never been raised before. With the stock market into the circulation time, previous research has undergone a fundamental change in the background; this contribution will offer the perspective of the aspects of research.