Empirical Analysis On The Impact Of Institutional Investors On The Quality Of Listed Companie’ Saccounting Information

Accounting information is the information that the company convey the financialposition and operating results of the company to investors, creditors and otherstakeholders through the form of financial statements, financial reports or note, it’squality affect investors and managers’s decisions. However, there are seriousinformation asymmetry between the shareholders and management, as the entrustedparty, managers may in its interests to false accounting information. To a certain extent,this will shake the authenticity and reliability of accounting information. In recent years,a series of financial fraud cases as red light industrial, Joan Min Yuan, Yin Guang Xia,dong fang boiler and wu liang ye "lawsuit" and so on have fully exposed manyquestions existing in the quality of accounting information of listed companies in China.To some extent,it also shows that the governance structure of listed companies is notperfect, so the managers have the opportunity to manipulate accounting surplus. Thus,to improve the quality of accounting information, the shareholders must strengthen thesupervision of the manager. For medium and small shareholders, they lack theprotection of the law, at the same time, their strength is weak, it is weak for them tocarry out effective supervision of listed companies, so that it further hindered the highquality of accounting information in China. But institutional investors can well solvethis problem and complete the supervision of listed companies. Because they have astrong research team and strong professional ability, they can continue to study andsupervise the listed companies, in order to they found the accounting informationdisclosure problems in a timely and effective manner. Therefore, this article willintroduce the concept of institutional investors, evaluate whether it can play ashareholder activism to participate in corporate governance to improve the quality ofaccounting information.At first, this thesis starts from the connotation of institutional investors, through toknow the connotation, characteristics, categories and governance effect of institutionalinvestors, then based on principal-agent theory, property rights theory and behavioralfinance theory, this thesis try to sort out the outline and the causes of the active role ofinstitutional investors. Furthermore, the thesis has testified the influence of the activerole of institutional investors to the quality of accounting information from threerespective of cause analysis, mechanism analysis and mode of action. In the empirical test part, the thesis chooses the2003-2010of China’s7465listed companies as a sample.Then, by controlling other factors of affecting the quality of accounting information,this thesis uses descriptive statistics analysis, correlation analysis and multiple linearregression method, at the same time,basing on the eamings persistence model, itexamines the relationship between institutional investors and the quality of listedcompanies’accounting information.Because institutional investors have the ability to use their professional knowledgeand information superiority, recognition with high quality of accounting information oflisted company, when choosing investment object they will screen according to thelevel of quality of accounting information of listed companies. So, whether is themanner in which have higher quality of accounting information of listed companies toattract investments by institutional investors, or institutional investors participating incorporate governance effectively promote the quality of accounting information of listedcompanies? To solve this problem, this thesis conducts robustness check by using at theend of the third quarter alternative final institutional investor shareholding institutionalinvestor shareholding in the model.The empirical research results show that institutional investor’s shareholdings andnumbers have significant positive influence on the quality of accounting information oflisted companies, in line with expectations hypothesis. This shows that in listedcompanies institutional investor’s stake and number can effectively improve thecompany’s accounting information quality, it also shows that institutional investorsparticipate in corporate governance and play a very good supervision on themanager.Moreover, based on the current ratio as non-tradable shares reform affect thesubstitution variables to inspection institution investors about whether the role of thepublic company accounting information quality will be influenced by it. The empiricalstudy results show that the increase significantly improve the float for institutionalinvestors acting force of the public company accounting information quality, in linewith expectations hypothesis. Finally, according to the findings, this thesis gives someadvices and exists deficiencies in the monk to be improved.