China's Government-backed Private Corporate Executives On The Quality Of Accounting Information

In the process of transformation from planned economy to market economy,private enterprises establish political connections from the executives whom withgovernment background. Therefore, the enterprises get tax preferences, financingincentives, thus the value of the enterprise got increased. However, whether theexecutives whom have governmental background will have impact on the quality ofenterprises’ accounting information quality, which would be further studied.This paper selected two samples of Chinese private listed companies for empiricalresearch, Shanghai and Shenzhen stock exchange, which were listed during the yearof2004and2011. Firstly, the author examines the relationship between executives’government background and the quality of accounting information. Then, theexecutives’ government background was divided into central government level,provincial government level and local government level background to be studied. Atlast, the types of executives were divided into Presidents and General Managers to beresearched. After the research, the author found the relation between the executives’whom have government backgrounds and accounting information quality is asignificant negative correlation. At the meantime, the study also found that there areno significant differences between the three levels of executives whom havegovernment backgrounds and the two types of executives.In this paper, we study the relationship between the executives’ governmentalbackground and accounting information quality, and to have further discussion basedon the levels and types. We believe the study enriches the literature, and which is alsobeneficial to improve the quality of company management.