Research On The Relationship Equity Incentive Of Listed Companies And Earnings Quality

With the development of market economy, innovative company of modern management system, on the one hand to improve the operational efficiency of enterprises, on the other hand, also bring the enterprise a new problem. In the present enterprise system, with the separation of ownership and management of enterprises, they produced a principal-agent relationship between shareholders and managers. Since both sides of the contract as well as incomplete information asymmetry, so the interests of the client and the agency more serious conflict, mainly to increase agency costs, erosion of shareholder wealth, the company earnings decline in the quality of financial reporting. In order to effectively address this problem, improve the company's earnings quality and safeguard the interests of investors, avoid executives desiccation and fishing short-term behavior, the companies have launched equity incentive plan, designed to give executives a certain allocation of the remaining ownership interests of the company, So that the interests of shareholders and the company's to be bundled?Scholars abroad think the company's equity incentive plan will help to improve corporate performance, improve the quality of the company's earnings, it played a positive effect of earnings management. However, at home, whether it can be like the company expected, to play a long-term incentive to improve the quality of the company's earnings, in turn, whether the level of earnings quality associated with implementation of equity incentive, which is the focus of this paper issue.Based on our country the implementation of equity incentive of listed companies from 2011 to 2013 as samples, Firstly, Jones model, in t-1, t, t + 1, respectively, were studied in three stages, to verify the listed company after the implementation of equity incentive, earnings management behavior, making earnings decline in the quality. At the same time using the DD model for auxiliary, verify executives of listed companies in the previous period, current surplus exists reducing company earnings management behavior, the latter in order to obtain higher yields, increasing the presence of positive corporate earnings amount to earnings management behavior. Secondly, Management equity as substitution variables of equity incentive, using the results obtained by the models jones to establish regression model to verify the relevant of earning quality and implementation of equity Incentive,as well as its impact on the implementation of equity incentive. Finally, according to the conclusions of this paper proposes, putting forward policy recommendations to effectively implement equity incentive,including improving the corporate governance structure of listed companies; strengthen information disclosure, increase supervision; regulate capital markets, improve market efficiency; strengthen the legal system construction, improve earnings quality.