Research On The Relationship Between The Institutional Ownership And Accounting Information Quality

Accounting information plays an important role in corporate governance because of its pricing and decision-making. However, it is common that managers often manipulate the accounting information worldwide. Therefore, theorists and experts pay more and more attention to how to reduce the opportunistic behavior of the management .In the same time, institutional investors develop rapidly and they are actively involved in the corporate governance, which is named"institutional shareholder activism". There is academic interest to study whether the institutional shareholders concern and supervise the accounting information quality of the listed companies.This paper uses the normative and empirical methods. Firstly, it sorts out the domestic and international literature about the relationship between the institutional investors and the quality of accounting information, analyzes the theoretical basis and monitoring incentive and monitoring approach and then develops the hypotheses. Secondly, this paper examines hypotheses by the OLS regression method with the data from Chinese listed companies between 2008 and 2009. The results indicate that the institutional investors have a positive impact on the quality of accounting information; moreover, this paper classifies the institutional investors into two categories by k-means based on past investment behavior, the results confirm that long-term institutional investors have the significant effect on the quality of accounting information, but the short-term institutional investors have no effect on the managerial information disclosure decision. Lastly, this paper presents the conclusions and puts forward the recommendation which is useful to the institutional investors and the capital market.