An Empirical Study Of Equity Restriction Effect On The Earnings Management

Since the reform and opening up, our country’s economic develops rapidly, the stock market and capital market matures, but often accompanied by the rapid development of a series of imperfect, triggering a series of problems.In recent years, Listed Companies in China have been repeatedly exposed scandals, increasing emphasis on community transparency and effectiveness of the surplus of information disclosure, earnings management has begun to attract more attention.The importance of earnings information is self-evident, it is not only reflect management’s fiduciary fulfillment, but also an important basis for the majority of investors decisions.Quality of earnings information in addition to the objective of showing the status of listed companies, to meet the information needs of users, or a sign of effective market development. Imperfect corporate governance is one of the important reasons of earnings information, and the ownership structure of corporate governance mechanisms builders, equity restriction is part of the ownership structure. After the basic completion of the share reform, Chinese ownership structure has undergone a qualitative change in the shareholding structure of checks and balances type sight slowly approached the masses, but the "dominance" is still dominant.Earnings management is a hot issue of accounting practices and theorists research, so far, domestic scholars have done a lot of research on earnings management, including "the existence of earnings management behavior","earnings management’s motivation","earnings management’s objective conditions "and so forth.In recent years, there are various studies on the impact factors of earnings management, such as governance, institutional investors, R&D investment, etc., but because of a late start, so a lot of research is not very deep.Domestic and foreign scholars on earnings management fruitful, standing on the footsteps of their predecessors, from the perspective of equity restriction of this article to explore the structure of the equity Listed Companies in China on the impact of earnings management situation.This paper summarizes previous studies abroad and analysis, using a modified Jones model empirical analysis, eventually found:Equity checks and balances exist to suppress the level of earnings management would be to some extent, with the increase in equity restriction, the inhibitory effect of enhanced; However, the inhibitory effect is not absolute existence, there may be collusion between controlling shareholders, common "tunneling" the company’s interests.