Study On The Correlation Between Audit Committee And Earning Management

Audit committee takes important position in corporate governance. It controls earning management to some degree by supervising the process of annual reporting. Management control earnings by means of accounting judging. In various arrangements for the management, the accounting system provided the motivation of earnings. Earning management leads earnings of listed companies annual to deviate from economic income, and then affect the quality of earning. Earning management reflects management which in purpose of controlling disclosure. It main objects is the financial reporting information for external. The quality of information is an important landmark of evaluating the health of company governance. The independence and professionalism and authority of the independent director have vital influence in earning judgment.From the theory of commissioned agent and corporate governance, we analyze the importance of the audit commission in corporate governance structure and the influence of characteristics on the earning management. Earning management is a key indicator of corporate governance standards. We analyze the internal connecting of the audit committee and earning management. Then we explore the characteristics of the audit committee in improving corporate governance structure. The theories explain the independence and professionalism and authority and professional of audit committee. From the basis discussions of theoretical, this article observes the data of listed company by data collection and analysis, then set up individual proposals to improve the listed company audit committee system.