Earnings Management After The Introduction Of The Board Characteristics

The study of efficiency of board of directors and the relationship between board of directors and earnings management is both theoretical and practical. This paper examines the relations between earnings management, measured by mended abnormal accruals ,and board characters of 1099 companies which has issued A shares in China in 2004 and in 2005. No significant relations is found between board members an-d earnings management. No significant relations is found between board meeting frequency and earnings management. When the board chairman is the CEO, the company is more likely to engage in earnings management. A negative relation is found between percent of shares owned by board of directors. No significant relations is found between the percent of directors who are not paid and earnings management.A negative relation is found between the percent of directors who owns shares and earnings management.This paper indicates that it is still far from giving full play to the function of board of directors in China. The structure of board of directors needs to be perfect. Only by solving the problems of board of directors can we improve the whole accounting information quality of listed companies and reduce earnings management in China.