Agency Cost In Perspective Of Earnings Management--For Anhui Province And Jiangsu Province

As China’s economy continues to grow rapidly and listed companies to complete share reform of listed companies will become China’s economical development in the groups. The agency conflict within the company led to an agent in order to achieve the goal of maximizing corporate value management approach to manage a surplus, whitewash financial reports, commissioned by deception and other stakeholders. So the need for listed companies earnings management agency costs and to study the relationship of agency costs and the relationship between earnings management for listed companies to reduce agency costs, and promote the development and effective control of the company’s earnings management advice.Based on the literature review and agency cost theory study found that Tobin’s Q, board size, managerial ownership ratio, asset -liability ratio, the proportion of independent directors of listed companies will be influenced by the size of the agency costs.Thereafter, the paper selected is located in the Yangtze River Delta with Anhui and Jiangsu provinces to study the sample data listed companies. For reasons arising from agency conflicts, as well as the factors that affect the agency costs of earnings management motive, means and methods for measurement of earnings management theory and Anhui and Jiangsu provinces for listed companies select the relevant indicators for agency costs and earnings management research.Then, we use the specification and empirical research method of combining, the choice of Jones modified model measured the degree of earnings management and the establishment of agency costs and earnings management of multiple regression model, using multiple regression analysis Eviews6.0 software. The results show that, Anhui and Jiangsu provinces and the governance structure of listed companies cannot effectively play the role of governance, there is earnings management behavior. This study shows that a listed company, Anhui, Jiangsu and Anhui, agency costs are higher than earnings management of listed companies is higher than Jiangsu, indicating higher agency costs more easily through the listed company earnings management behavior to the company’s financial reports whitewash, blinded by the majority of investors and undermine their interests. Through this study found that agency costs and Tobin’s Q, board size, managerial ownership ratio, asset -liability ratio, the proportion of independent directors have a relationship. Meanwhile, the use of listed companies in Anhui and Jiangsu Province’s data show that the higher agency costs companies more likely to manage earnings, agency costs and earnings management is significant between the positive correlation.