The Research On Earnings Management Of Listed Companies And Corporate Governance Structure

In recent years, earnings management of listed companies of our country become more and more serious, Illegal phenomenon surface from time to time, for example, ZhengBaiwen and YinGuangxia disclosure false accounting statements. From a theoretical perspective, corporate governance structure has an important impact on earnings management. So the paper takes listed companies as a sample to research earnings management from the perspective of corporate governance structure.Firstly, the paper explains the meaning and theories of earnings management, defines earnings management again, analyses positive and negative roles of earnings management. Against the viewpoints for earnings management, the paper points the current attitude is to control earnings management in a suitable area.Then the paper takes internal governance structure and external governance structure of listed companies as the framework, analyses the impacts of governance structure of listed companies of our country on earnings management by standardized methods, and points out corporate governance structure plays an important role in controlling earnings management.Empirical research is the core of the paper that is divided into two parts. The first part is empirical research for the measurement of earnings management. From the audit opinions, the paper selects listed companies as a sample that is issued non-standard audit opinion in 2005 Annual Report of Listed Companies in China. Based on evaluation model of accrued profit, the paper elects the adjusted Jones model, takes intangible assets and other long term asserts, below-the-line item, operating cost and inventory into it, form a new model of earnings management. After tested and adjusted the new model, the paper measures earnings management. The second part is empirical research the impacts of governance structure of listed companies of our country on earnings management. The paper elects variables that can descriptive effectively corporate governance structure, and test the relation between corporate governance structure and earnings management using methods of descriptive statistics and regression analysis. Research shows that the correlation between the holdings of the first major shareholders and earnings management becomes positive; the correlation between holdings of institutional investors and earnings management becomes positive; the correlation between shares balance degrees and earnings management becomes negative; the correlation between board size and earnings management becomes negative; earnings management is more obvious when two grades are ecumenical; the correlation between the holdings of executives and earnings management becomes positive.Lastly, according to the conclusion of empirical research, the paper raises some effective advices to improve corporate governance structure of listed companies, such as to develop institutional investors, to improve the system of independent directors, to practice incompatibility duties, to improve the system of information disclosure, to introduce creditors' control timely, and so on, to constraint the action of earnings management of listed companies.