A Study On Earnings Management's Impact On Performance Of Listed Companies Under Background Of Shareholder Control

With the development of Chinese security market, more and more importance is being attached to corporate governance. Substantial Shareholders are in dominant position over most corporate decision make, and influent or even control listed firm in China. Meantime, earning management commonly exists in listed firm. Because of the existence of contract and communication friction, the manager's interests are not always consistent with minority shareholder and they can't communicate transparently and completely. This provides motivation and condition for managers to operate earnings management. The existence of shareholder control background also provides company driving force to adopt earnings management. The companies which shareholders are in absolute control position have higher degree of earnings management.Firstly, the literatures of shareholder control and earnings management are summarized. Secondly this paper analyzes the relationship between earnings management and shareholder control and the mechanism of shareholder control's influence on the relationship between accrual and real earnings management. Thirdly, the listed companies in Shanghai and Shenzhen A stock market from 2010 to 2014 are selected as research samples and Logistic regression model are constructed to test the impact of earnings management on corporate performance. Then, we test the moderate effect of the existence of shareholder control on the relationship of earnings management and corporate performance. Finally, the listed companies which contain the background of shareholder control are selected as sample objects. And we research the state of shareholder control, ownership concentration and separate degree' moderate effect on the impact earnings management on corporate performance. The result shows that earnings management and shareholder control backed companies have negative impact on corporate performance. Besides, it can weaken the relationship of earnings management and corporate performance. The state of the shareholder and ownership concentration both has a positive impact on corporate performance. The state of shareholder can weaken the negative relationship between accrual and real earnings management and operating performance. While the ownership concentration plays an opposite role. The separation degree has a negative impact on corporate performance. Moreover, it can reinforce the negative relationship between accrual and real earnings management and the listed companies operating performance.After discovered two types of earnings management' economic effect and researched the interaction effect of earnings management and shareholder control's three different perspectives, our conclusions help others to enrich and deepen their understanding of accrued and real earnings management behavior and their economic consequences, and can also do help to accounting information user to have a more in-depth understanding of financial statements.