Investor Relations Management And Earnings Quality

In 2006, with the great progress and eventual completion of the share reform, China's capital market entered a new era—the full circulation times. This is an era of the sovereignty of investors, and the environment of investor relations management (IRM) has fundamentally changed. Investor relations can influence a company's absorption ability of social capital and affect investors' valuation towards the company. The better IRM capability of the company, the easier it is to attract investors, the easier it is to receive social capital. Then its premium price and shareholders' equity will be higher. Therefore, companies should pay more attention to IRM and improve it greatly.China's IRM annual report (2006) was issued, in the full circulation times, which is good for the shaping of China's IRM culture and improves the companies' strategic communication skills. Therefore, we chose the top 100 enterprises in the IRM annual report (2006) as samples. Then we collected their IRM scores, financial data and audit reports from 2004 to 2006, and designed two models to study the relationship between IRM and the listed companies' earnings quality. The results showed that if a listed company has good investor relations management, then its earnings quality will be good, too.