Empirical Study Of Corporate Governance Impact On Earnings Management

In recent years, in order to achieve better development a variety of industries, resources, information enterprises have chosen to market, the stock market affect on allocation of social resources is more and more important, the impact on China’s macro and micro economy is also growing. If capital market can effectively play the allocation of social resources function is rely on the main basis of accounting information disclosed in financial statements of listed companies, where earnings information resident in a key position. However, with advances in capital markets and the regulations are not perfect, imperfect and asymmetric information problems, the listed company’s earnings management more and more prominent, not only affects the authenticity of accounting information disclosure, but also seriously affected the development of the securities market, the occurrence of domestic and foreign financial fraud cases so that we recognize the dangers of earnings management behavior. Therefore, the inhibition of the occurrence of earnings management, improve the quality of accounting information disclosure is the most important economic development. By summarizing research scholars found that the root of earnings management is a loophole in the corporate governance structure. But throughout the research literature at home and abroad, although there are many scholars studying on corporate governance and earnings management, there is no one study on the relationship between the corporate governance structure and earnings management from the view of difference competition point. In this context, the paper industry based on competitive differentiation, with the standardized research methods and empirical research methods, from four internal governance structure influence earnings management to study, aim at promoting the establishment and improvement of corporate governance structure, reducing earnings management of listed companies to improve earnings quality, thereby promoting healthy capital market and securities market, and orderly development. The innovation of this paper is studying on the relationship between the corporate governance structure and earnings management from the view of difference competition point.The study is based on the differences of Industry competitive, and regulate research and empirical research methods, divides Shenzhen A-share listed company into two different levels of competition by using Herfindahl Index(HHI), and uses the modified Jones model from the ownership structure, the board characteristics, Supervisory Board features, and management the four aspects of the entrails corporate governance structure,using the 2013 Shenzhen A-share listed company’s data for statistical analysis, to study on the relationship between corporate governance and earnings management. The results showed that the degree of competition in different sectors, the relationship between the two is different. In this paper, the following conclusions: intense(1) Intense industry competition in the listed companies: earnings management will not end with the ratio of the controlling shareholders from the negative to the positive correlation transformation, described owned by controlling shareholders to remain within a certain range in order to effectively inhibition of earnings management; state-owned shareholders of the company to manage earnings without promoting; the number of meetings with the board of directors and board of supervisors meetings to increase the number of listed companies, the less likely earnings management; increase the number of independent directors can effectively suppress earnings management; management The higher the stake in order to seek their own interests but impossible to manage earnings, damage the overall interests of the company.(2) less intense industry competition in the listed companies: the proportion of the controlling shareholder relationship between earnings management and the specific conclusions need further empirical research to validate; state holding will not increase the likelihood of earnings management companies; the number of meetings of the Board of Directors increase will reduce the generation of earnings management; on the contrary, increase the frequency of meetings of the Board of Supervisors may increase the company’s earnings management behavior; increase the number of independent directors should not reduce earnings management; managerial ownership can inhibit the production of a higher proportion of earnings management behavior. Finally, we put forward specific proposals from four aspects of internal corporate governance structure based on the results of empirical research.Empirical study of this paper can contribute to listing companies to establish a reasonable, making the corporate governance structure more effective, to coordinate the interests of stakeholders and reduce agency costs, then regulate responsibility, the rights and interests among stakeholders; empirical study also can help government to develop relevant policies to provide a basis to improve the science and effectiveness of government regulation; can give full play to the effectiveness of the role of capital market allocation of social resources, and promote the capital market and the healthy and orderly development of the securities market.