Corporate Governance And Earnings Quality: From The View Of Governance Efficiency

This paper explores the inherent connections between corporate govemance and earnings quality of A-share listed companies in China from 2003 to 2007. Different from the existing research,this paper under the conditions of two dimensions of governance efficiency (agency conflicts and performance) to investigate the association between of corporate governance and earnings quality. This study found the level of the agency conflicts would affect the relationship between corporate governance and earnings quality.In the group of high-agency conflicts, corporate governance has the remarkable influence to the earnings quality, while in the group of low-agency conflicts, the affect is not obvious; the level of the performance would affect the relationship between corporate governance and earnings quality, in the group of low-performance, corporate governance has the remarkable influence to the earnings quality, while in the group of high performance, the affect is not obvious; When investigate the level of the agency conflicts and the level of the performance at the same time, the level of agency conflicts and level of the performance will effect the relationship of corporate governance and earnings quality together, the performance will plays a leading role. In the case of low-performance, regardless of the degree of agency conflicts, the corporate governance has a significant impact on the earnings quality. In the case of the high-performance, the relationship of corporate governance and earnings quality is not obvious.