Ownership Structure,Internal Control And Earnings Quality

This dissertation is guided by "listed company’s internal control guidelines "ofShanghai and Shenzhen Stock Exchange from internal control perspective. Using theinternal control evaluation report of the2106A-share listed companies issued from2007to2009, this dissertation defines the related concepts and uses SAS9.1statisticsoft to analyze the impact of ownership structure on earnings quality by the mediationeffect of internal control.Based on the core of internal control, this dissertation measures ownershipstructure in three forms: the shareholding of the largest shareholder, ownershipbalance power, and the shareholding of institutional investors, use Jones model toevaluate earnings quality, and tests intermediary effect of internal control on therelation between ownership structure and earnings quality. The empirical results showthat:(1) The shareholding of largest shareholder has a significantly negative influenceon earnings quality, in other words, the higher share ratio of the largest shareholder is,the lower earnings quality will be; in addition, ownership balance power is moreconducive to improvement of earnings quality, the shareholding of institutionalinvestors is high, the earnings quality will be lower.(2) The shareholding of largestshareholder is negatively correlated with internal control which is in form of "thehigher shareholding of the largest shareholder, the lower level of internal control";The relationship between ownership balance power and internal control issignificantly positive, the higher ownership balance power, the better internal controllevel; The relationship between the shareholding of institutional investors and internalcontrol is significantly positive, which is to say"the higher institutional investorsshareholding, the better level of internal control".(3) The internal control has theintermediary effect on the relation between influences of "shareholding of the largestshareholder, institutional investor" on earnings quality, but for the ownership balancepower,the intermediary effect is not obviously.At last, this dissertation summarizes the related conclusion briefly, put forwardsome suggestions which is based on the related research conclusion, and point out thelimitation and future research direction.