Study On The Effects Of Corporate Governance On The Accrual Reliability

Because the investors transactions' decision are based on a variety of information in capital markets, the quality of information determines the transactions' cost, and determines the function of the capital resource allocation. However, the international investors suffered huge losses because of a series of financial scandals in recent years, which has brought serious harm to the development of the capital markets. After a series of financial scandals, people have to think about the following problems of the quality of accounting information: what is wrong with the quality of accounting information, what led to the distortion of accounting information. As we all know that the reliability is one of the basic features of the quality of accounting information, so the distortion of the quality of accounting information equals the accounting information lack of reliability. We study the effects of corporate governance on the accrual reliability because that there is little study on this field and the corporate governance structure is related to the generation of the accounting information. This paper studies the effects of corporate governance on the accrual reliability. First, we put forward our hypotheses based on the logical reason. Then we build the research model according to our hypotheses. Finally, we use empirical methods to test our hypotheses.The innovations and contributions of this paper are: (1) Study the effects of corporate governance on the accrual reliability for the first time in China. And we extend the study of the effects of corporate governance on the accounting information to the reliability field. At the same time we have built a research model, and we point out a number of future study directions based on our research model; (2) We use the accrual incremental earnings persistence to measure the effects of corporate governance on the accrual reliability creatively, which solve the problems of difficulties of measuring the accrual reliability and the effects of other factors on the accrual reliability; (3) Ascertain the effects of the corporate governance on the accrual reliability, and analyze the reasons for the effects.The conclusions of this paper are: (1) The companies with high degree of ownership concentration have lower accrual reliability; (2) The managements'stake has no significant impact on the accrual reliability; (3) The nature of the actual controller of a listed company has no impact on the accrual reliability; (4) The companies with high proportion of independent directors have lower accrual reliability; (5) The companies with big board size have lower accrual reliability; (6) The companies with the separation of board of directors and general manager have higher accrual reliability; (7) There is no significant relation between the board meeting frequency and the accrual reliability; (8) There is no significant relation between the size of the board of supervisors and the accrual reliability; (9) The listed companies which have established an audit committees have higher accrual reliability; (10) The companies with high proportion of institutional ownership have higher accrual reliability.Finally, we make some suggestions on the improvement of the corporate governance based on our empirical results.