Research On The Impact Of CFO Ownership On Listed Companies’ Earnings Management

CFO——Chief Financial Officer is the product of corporate governance’s developed to a certain stage. CFO directly employed by the board of directors, is one of the company’s senior management, responsible for the company’s accounting information system construction, financial operations and supervision. CFO represent the interests of shareholders and other management staff supervise, play an important role in maintaining the company’s operations and to protect the quality of management accounting information, etc. CFO plays an important role for strategic support and financial management in corporate governance, so the CFO system is an important content of establishing and perfecting corporate governance mechanism. Our country’s existing research on CFO are mainly in the CFO’S background characteristics, the ability of CFO quality and CFO changes’impact on the performance of the company and other aspects.There is lack of quantitative research on whether the CFO Shareholdings have impact on corporate governance especially on corporate’s earnings management, In this paper, combined with the background of listing corporation CFO system in our country and CFO ownership status, based on the perspective of earnings management, using the method of standardization research and empirical research, tests the effects of CFO ownership on listed companies’ earnings management. By comparing the impact of different nature of property right’s CFO ownership on earnings management and CFO holdings to positive and negative earnings management, the dissertation aims to obtain some findings with theoretical and practical values, then puts forward some relevant policy recommendations.This study is divided into five parts. The first chapter is an introduction. Introduces the research background and significance, reviews the domestic and foreign research about the executive equity incentive and earnings management, and then come to research ideas and research methods. The second part is the related theoretical basis. This part defines the related concepts of the research object, the principal-agent theory, incentive theory, managerial power theory are expounded. The third part is the theoretical analysis and hypotheses. This part makes a comprehensive study on China’s listing corporation CFO system, CFO ownership status and action mechanism, make an in-depth analysis of action mechanism of CFO ownership on firm earnings management. On this basis, the article put forward the research hypothesis. The fourth part is the empirical part. Using Shanghai and Shenzhen A-share listed companies who implements equity incentive from 2006-2013 as samples, the dissertation tests the impact of CFO shareholding on earnings management according to the application of Yang Haiyan (2012),using modified Jones model to measure earnings management. The fifth part is the conclusion and policy suggestions. The study found that:(1) CFO holdings had a significant effect on earnings management, CFO holdings will significantly improve the level of earnings management of the listing Corporation; (2) compared with the non-state-controlled enterprises, the impact of CFO holdings on earnings management is more significant in state-controlled enterprises; (3) After distinction positive and negative earnings management, CFO holdings has a significant positive correlation with positive earnings management, while no significant relationship to negative earnings management.