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The Effect Of High-ranking Managerial Corruption On Management Earnings Regarding Listed Companies' In China

Posted on:2017-12-07Degree:MasterType:Thesis
Country:ChinaCandidate:Z Q ZhangFull Text:PDF
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Since the 18th CPC National Congress,the Chinese government has been implementing a series of drastic measures against corruption.This paper carries out an empirical research to examine the relationship between corruption of high-ranking managers and earnings management based on the data collected concerning corruption cases.Besides,I also add the political background into this paper which might affect the relationship greatly.Former researchers mainly focused on the relationship between corruption and companies' achievements,most of which have reached a result of negative coefficient.This paper reveals a negative relationship between corruption and earnings quality.In dealing with data,I collected 136 companies involved in corruption cases from 2013-2015 and chose matching samples.As a result,I found that a company is more likely to adopt earnings management when there is a high-ranking manager punished because of corruption.Firstly,it is a result of the erosion of company's achievements which is due to corruption.Seconly,it indicates that the overall environment of the company is weak to some extent and they would adopt earnings management more freely.When we divide the data into two parts according to if a company is state-owned,it shows state-owned companies tend to adjust earnings to a larger extent if their high-ranking managers have been involved in corruption.This means the whole environment of state-owned companies makes high-ranking managers adopt earnings management more freely.This paper reckons that the final controller of an enterprise is a kind of description of its political background.Particularly,not only the internal control system and salary system but the political background of state-owned companies differ greatly from other companies.As to the third hypothesis,when we take political background into account,the relationship still exists and is exaggerated by it.That is,when high-ranking managers of a company have political background,then the corruption of its high-ranking managers will exert a greater influence on its earnings management.As a whole,we can confirm that,under the protection of political background,the relationship still exists and has been exaggerated.This paper contains six parts and the overall arrangement is as follows:The first part,introduction.This part mainly introduces the background,significance,research content,research ideas and innovation points of this paper.The second part,literature review.Study on the definition of this part mainly reviews the earnings management,corruption and high-ranking managerial political background,and analyzes the researches related to the theoretical contributions and shortcomings,summarizes the problems needing further study.The third part,theoretical analysis and hypothesis.This part puts forward the core assumption of this paper on the basis of the relevant theory.The fourth part,research and design.In this part,we first explain the choice of samples and the source of data.Secondly,it defines the political background of high-ranking managers,the corruption of the top managers and the earnings management as well as other control variables.Finally,on the basis referring to the relevant literature of local and abroad,this paper builds the model of this paper.The fifth part,research results and analysis.It involves correlation analysis,empirical results and robustness tests.The sixth part,conclusion and policy suggestion.This part summarizes the conclusion of this paper and puts forward some related suggestions,and then demonstrates the deficiencies of this paper.Besides,the innovation points of this paper mainly concerns two aspects:firstly,there are few researches analyzing the effects of corruption on earnings management under different political backgrounds;secondly,this paper keeps pace with the anti-corruption trend and I do hope I am able to contribute to related researches and make some effective suggestions regarding anti-corruption work.
Keywords/Search Tags:corruption, earnings management, political background, state-owned
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