Study On The Effect Of Corporate Governance On Earnings Management In Listed Companies In China

Today faced the increasing pressure of competition in fierce domestic and international market in the world, the earnings management behavior is becoming a focus in the modern accounting theory, which is becoming more and more popular, Seriously affecting the healthy development of capital market. Earnings management is rooted in the interests of the conflict among the various stakeholders and corporate governance regulating the relationship among various stakeholders is a mechanism, with the improvement of its structure, which can effectively reduce earnings management. Therefore studying the impact of governance structure on earnings management in listed companies is of great significance.In reference to the previous basis of research achievements on corporate governance structure and earnings management at home and abroad, this paper will use the combination of normative research methods and empirical research methods and systematic analysis for studying the influence of governance structure on earnings management in listed companies. Firstly this paper introduces the connotation, motivation, method, measure and correlation mode of earnings management, secondly, this paper introduces the connotation of the corporate governance structure and its basic framework, and then in the theory, this paper summarizes the influence of company’s internal and external governance structure on earnings management. And combining with the actual situation in our country, this paper chooses499listed companies from2006to2011as research samples and empirically analyzes the influence of governance structure on earnings management in listed companies.In empirical research, this paper firstly using the extended Jones model to measure the degree of earnings management, as the dependent variable in the empirical research, and then in the ownership structure, board characteristics, characteristics of the board of supervisors and managers, four aspects are chosen as the corporate internal governance structure of relevant indicators and as the independent variable in the empirical analysis. Lastly, the paper chooses the revision of asset-liability ratio, the net assets income rate and the revision of company size as three control variables. Multiple linear regression model is established, and research hypothesis is put forward. This paper uses descriptive statistics and multivariate linear regression measuring methods to validate hypothesis and draws a conclusion.The proportion of state shares, legal person share, tradable shares, and the first largest shareholder, independent directors, supervisors and board size, supervisors scale, the chairman and general manager joining together in two position and fixed asset size and earnings management degree is a positive correlation. The second to the fifth largest shareholder’s shareholding proportion, board meeting frequency, the proportion of director ownership shares, number of annual meeting of the board of supervisors, executives share-holding rate and the top three company executives annual salary, correction of the asset-liability ratio and net assets income rate and the earnings management is a negative correlation. The four committee is not associated with earnings management.Finally, according to the research conclusion and the reality of our country, the paper expounds a few strategies to perfect the corporate governance structure and reduce earnings management behavior, which is helpful to promote the development of capital market.