Financial Marketization, Bank Credit And The Supervision Over Earnings Management

The former scholars' studies showed that, credit governance was not effective against the background of Chinese economic restructuring, and the main reason was the low-level development of Chinese financial industry. Along with the deepening reform of financial system, the market-oriented process of the financial industry has been accelerated. On the background of macroeconomic development, this paper studies creditor governance especially the governance function of the bank creditor. The research on this issue is very meaningful for evaluating the achievements of Chinese financial reform and deepening this reform.Banks supervision over earnings management of the firms is one side of the credit governance. In order to making an intensive study on the issues of bank credit governance, this article choose companies' datum from 2002 to 2005, which are obtained by Shanghai and Shenzhen Stock Exchange. On the basis of adjusted-Jones model, this paper calculates the companies' discretionary accruals as the indication of their earning management. The purpose of this article is to find out the supervision effects of the bank creditor over the earnings management in terms of macroeconomics and macroeconomics. This paper uses single variable regression analysis, multivariate regression analysis and multiply item to do the empirical studies, and the results indicate that: although the development of the financial industry is beneficial for the bank credit governance, the development of Chinese entire financial sectors is of low level and the development of each district is imbalance. So the supervisory effects of the bank creditors to the earnings management are still ineffective at present. Specially, this ineffective governance of the bank creditors mainly reflected in samples of the state-owned companies and the less developed districts. And credit governance of the long-term bank loans is better than short-term bank loans. Thus it can be seen that the key point to solve these problems is to deepen the reform of our country's financial system and the banking industry.The innovation of this paper is that, writer combines the factors of macroeconomics and macroeconomics to do the empirical studies on the governance efficiency of the bank creditor.