| In the beginning of21st century, some large diversified private enterprise groups gradually began to appear, becoming a major force affecting Chinese economy. These diversified enterprise groups are called Chinese groups. They keep control of two or more listed companies, all of which are involved in diversified industries, leading to abnormal enlargement of the scale of strength. Chinese private enterprise group have been developed rapidly, which is similar to companies in other developing countries. At the same time, with the economic development, the role of accounting information is increasingly important. Accounting earnings quality of listed companies has become important accounting information that investors accounting supervision are most concerned about. In this context, after the formation of the private family mode, would its internal capital operation process have an impact in accounting earnings quality of family listed company? What kind of impact it will produce?The paper first reviews the development of private family mode in China’s capital market and the problem in early stage. Then the paper analyzed the basic characters of private family enterprise, their ownership structure and their financial condition. In the next section, actual control human behavior in private lamily mode is analyzed to explain the actual controller driven by different interests would produce different effects on accounting earnings, both occupied and supported. Then an empirical research on private listed companies from2006to2008is done, in which these companies are grouped according to whether they belong to family mode. This research studied the relationship of family mode and earnings quality of listed company. The paper analyses the relationship of actual controller, the percentage of ownership and earnings quality of family listed enterprise. Finally the following conclusions are reached.First, when the actual controller keep control in more than two listed companies, the sources of funding are more adequate. Thus the listed companies bear lower financial pressure. At the meantime, the internal substantial capital enables the enterprises to better play synergies. As a result, family mode enhances the companies’earnings quality.Second, when the actual controller of family enterprise manages more than one listed company, the enterprise may treats differently to listed companies due to different strategies and ownership. Specifically, the listed companies of lower ownership are hollowed out as the source of funds, thus reducing the earnings quality. Whereas, the listed companies of higher ownership pursue the sharing of revenue, as the result earnings quality is much better.Finally, on the basis of the theoretical and empirical analysis in this paper, combining the existing specific problem of Chinese listed company, the recommendations is proposed that how to improve the family listed company govern, as well as how to improve the earnings quality of listed company. |
