Ownership Structure And Earnings Quality

Earnings quality represents the image of the listed company, so people activelyexplore the factors influencing the quality of profit from many aspects in order toimprove its image. The relevance between ownership structure and earnings qualityhas been being a hot topic focused by the academic researchers，but the conclusionsreached by researchers from China and foreign countries differed greatly becausethere are different views on the same subject. This thesis takes listed companies inShandong province as objects through analyzing the data of ownership structure andprofit published by the companies, using the method of normative and empirical study,to explore the relevance between ownership structure and earnings quality. At last, wedraw on relevant conclusions.This thesis first introduces background and significance about the subject,reviews and summarizes the domestic and international research literature. Accordingto the principal-agent theory and asymmetric information theory, this thesis finds therelationship between ownership structure and earnings quality. Then, it analyzes thepresent situation of the listed companies in Shandong province, combining with theircircumstances and selects earnings quality as the dependent variable, the first bigshareholder’s shareholding (CR1), equity balance degree(ZHD), H3index, proportionof state-owned, legal persons and administrative officers as independent variables,company size asset-liability ratio as control variables, by use of EXCEL2003,SPSS17.0for empirical analysis. Before empirical analysis, it carries on thedescriptive statistical analysis, then, studies on the relationship between ownershipstructure and earnings quality. We draw on relevant conclusions: firstly, amongindicators to measure ownership concentration, between the first big shareholder’sshareholding and earnings quality, there is nonlinear relationship significantly; therelationship between ZHD, H3and earnings quality is not significant; secondly,among indicators to measure stock composition, the relationship between FRG、GGGand earnings quality is positive correlation significantly, but GYG is not significant. Finally, according to the empirical results, to optimize the equity structure oflisted companies in Shandong province, improve the corporate governance structureand earnings quality, speed up the economic development in Shandong district, Weput forward some suggestions, for example, maintain reasonable equity concentrationto form equity checks and balances, encourage institutional shareholders to participatein corporate governance, promote the implementation of equity incentive toexecutives, and so on.