The Positive Study On Effects Of Ownership Structure On Earnings Management In Iron And Steel Industry

The steel industry has always been the basic industries of the world of the national economy, its level of development is often used as an important symbol of a country’s economic level and it has a significant place in the national economy overall national strength. The steel industry is a typical strong-cycle industry. Faced with economic crisis, how will the China’s steel enterprises which is the world’s largest steel producer and consumer to deal with and survive the crisis stage, and obtain rapid development.It is the main problem the iron and steel enterprises who are facing. There are other "internal control" problems "due to the dominance status of the ownership structure of China’s steel companies and corporate governance mechanisms, which exist in name of the general meeting of shareholders, minority shareholders legal protection system imperfect, but it also makes the oversight of the management surplus manipulation difficult.In such a system background and the structure of corporate governance studying the correlation between the unique ownership structure characteristics and earnings management in Chinese steel companies, it has the guiding significance to standard and management earnings management behavior from the source in steel companies. It is also helpful to further improve the ownership structure.strengthen the company’s internal governance, promote the development of industry in the healthy direction and protect the authenticity and reliability of accounting earnings information.And it is also using for the government and other regulators to provide supervision and regulation of the steel industry policy recommendations, and respond positively to the government to strengthen the iron and steel industry supervision and enhance the quality of requirements.In this thesis we have summarized the new research results on earnings management of domestic and foreign scholars.We test the relationship between earnings management and shareholding structure of China’s steel companies through empirical method on the basis of the trends and causes of the ownership structure changes in the detailed analysis of the steel industry before and after the share reform. The full thesis can be divided into six parts:The first part introduces the research background and significance of the article, has a systematic review on the earnings management literature at home and abroad, and proposes research and research methods of this thesis.The second part firstly introduces the definition of the earnings management and equity structure, and then introduces the theoretical basis of the ownership structure on earnings management from three aspects:the efficient market hypothesis, the principal-agent theory and asymmetric information theoryThe third part analyzes the characteristics of the steel industry on the basis of the changes in equity before and after the share reform in China, mainly from the ownership concentration of shares outstanding changes to summary of the overall change of the steel industry equity reasons Following we analysis earnings management of China’s steel industry described the status quo mainly from the three aspects:intrinsic motivation, external conditions and the primary means of earnings management. Finally, we analyze the impact of the ownership structure of China’s steel industry on earnings management and the corresponding research hypothesis.The fourth part introduces the measure of earnings management model and sample selection and data sources and the design of the variable. In this thesis, we collect the financial data from the year2006to2011in the steel industry, and study it as a sample using the modified Jones model.The fifth part is the empirical part and we analyze the impact of ownership structure on earnings management through descriptive statistics, correlation test and multiple regressions to a concrete analysis of the steel industry on the basis of the dependent variable, independent variables and control variables.The sixth part summary the conclusion of this thesis and put forward the corresponding policy suggestions for the iron and steel industry.The empirical results show that:earnings management and the first shareholding ratio of the steel industry was inverted U-shaped relationship; the correlation between earnings management and the proportion of managerial ownership, the proportion of state shares was a significant positive correlation; and institutional investor ownership and circulation stake of the shareholders was a significant negative correlation. However, earnings management and equity balance of the regression results failed to effectively verify the hypothesis. Because the checks and balances of the steel industry is relatively low and it did not play the role of inhibition of surplus.The innovation of this thesis lies in three aspects. Firstly, we select the data from the year2006to2011of the steel industry as the research sample. It have different characteristics in ownership structure between steel industry and other industry. We research of ownership structure on earnings management in the analysis of China’s iron and steel industry reform and the change of the ownership structure on the basis of the characteristics of the iron and steel industry, and find it more pertinence and actual value. Secondly, most article which research on ownership structure and earnings management only take the discretionary accruals of absolute value as the dependent variable, but this thesis not only put it to research, but also put forward its corresponding reverse earnings management, regression, analyzes various conditions of surplus management and equity relationship, which is rare in many other articles. Thirdly. We add the" period expenses"," intangible assets and other assets" and" stock" these three variables in the Jones model on the basis of iron and steel industry of its own characteristics, because it makes it better interpretation the correlation between earnings management and ownership relationship of iron and steel industry.