Study About The Influence Of Institutional Investor On Accounting Information Quality

Information disclosure of public company, which can be used to measure the efficiency of capital market, is the key elements of information-public-system of securities business. Information that listed companies should publish without delay mainly contains: financial accounting information, auditing information and non- financial-accounting-information. Among all of them , financial accounting information is ranked as the key point. Financial accounting information can ease the information asymmetry between information provider and demander, it directly determine effectiveness of capital market. Financial accounting information is the vital index that investors used to estimate the earnings-generating-capacity, the state of operation and development potential of listed companies. So high-quality-information is the cornerstone of securities business's healthy development. Although financial accounting information is so important, the status of accounting information quality is still unsatisfactory. Institutional investors can have a hand in corporate governance by taking their professional advantage, so they can improve the effectiveness of public companies'internal controls. Under their supervise, the operation of public corporation may become much more standard, the process of information disclosure-decision-making also will be much more transparent, then the quality of accounting information will be improved.This paper firstly review related literature on institutional investors, accounting information quality and their relations; then analyze the relationship of disclosed accounting information quality and institutional investors, the probability and current manipulation of institutional investors to affect accounting information quality. On this groundwork, we propose the mechanism of action of this affection and raise hypothesis of this article. We collect the data of 866 listed-companies and research the relationship between institutional ownership and earnings quality, reliability and timeliness of accounting information. The result of our research show that institutional investors play positive roles on improving accounting information quality. In the end, we put forward some suggestions on how to making full use of institutional advantages and how to enhance accounting information quality.