A Study On The Influence Of Accounting Information Quality And Dynamic Adjustment Of Capital Structure By Revolving Door

Revolving door is a result of the tripartite game between accounting firm, auditor and client company, Sarbanes-Oxley (SOX) and the professional code of ethics for CPA in China has staged a series of measures for this phenomenon, including "one-year cooling" restrictions. Under guidance of the system and outsider supervision, while the economic consequences of revolving door phenomenon have eased partially, but it is still a hot topic from the perspective of its effects of accounting information and adjustment of capital structure. Based on China's special economic characteristics and the system background, this paper will explore mechanism of revolving door, finally protect auditor independence and improve the supervision mechanism in theory.Integrating the latest theoretical and empirical research results, this paper mainly set the upper echelons theory, signalling theory and pecking order theory as foundation, analyzing how revolving door influences accounting information quality (AIQ). At the same time, this paper studies the relationship between revolving door and dynamic adjustment of capital structure. Finally, with real activities earnings management as substitution variable of AIQ, we use the panel data from 2009 to 2014 to make empirical test and analysis.The results show that executive officers'affiliation with CPA do not significantly affect real activities earning management; Correlation between revolving door and AIQ is significantly negative. Specifically, the supervision executives play a supervision role of earnings manipulation, whereas decision-making executives have motivation and ability to influence AIQ. With the role of AIQ, the revolving door significantly slows down the speed of capital structure dynamic adjustment, while executive officers'affiliation with CPA demonstrates adversely. In particular, when the actual capital structure is higher than the target capital structure, speed of capital structure adjustment decreases downward, which shows the strategic effect. When the actual capital structure is lower than the target capital structure, speed of capital structure adjustment increases upward, which shows the treatment effect.