Study On The Influence Of Interlocking Directorates On The Contagion Effect Of Inter-Corporate Accounting Information Quality

Based on social network theory,the current research investigates the infectious effects of interlocking directorates on companies' accounting information quality from the both perspectives of static and dynamic analysis,and takes listed companies in Shanghai and Shenzhen A shares from 2011 to 2015 as samples.The empirical results show that the two companies connected with interlocking directorates have a high similarity in accounting information quality.Static analysis results indicate that:(1)When there are interlocking directors,the higher the quality of the accounting information of coupling enterprise,the higher the quality of accounting information of the target enterprise.(2)From the point of interlocking directorates' independence,the accounting information quality between interlocking companies becomes more similar when the interlocking directors are independent.This shows that the independence of the interlocking directors enhances the infections intensity of companies' earnings management.(3)From the point of interlocking directors' financial background,the contagion effect of earnings quality between interlocking enterprises will be more significant when there are interlocking directors serve as finance position,majar in finance or pass CPA exam.That is to say,the financial background of the interlocking directors will affect the quality of enterprise accounting information dissemination.(4)From the point of the strength of interlocking,the more the mutual directors in interlocking companies,the more similar the quality of accounting information between enterprises.According to the test results of the dynamic mechanism,the contagion of the accounting information quality of the enterprises only occurred when enterprises have interlocking directors.(1)the earnings management's quality of the enterprise is not similar until the interlocking relationship formed in corporates.(2)the earnings management's quality of the enterprise is similar before the dissolution of the interlocking relationship,but becomes disaffinity when the interlocking relationship dissolves.From here we see that there is a existing situation to imitate each other by interlocking directors,and at the same time,the results also testify the rationality of dynamic mechanism.The innovation of this research lies in: Break through the previous enterprise ontology perspective to inspect the affecting factors of accounting information quality based on the network relationship(interlocking directorates)between enterprises.It's the first time to use the indicator "Discretionary accrual profit" of earnings quality to study the influence of all interlocking directorates on the contagion effect of inter-corporate accounting information quality based on modified Jones model.This research not only supports the theory of social network in theory,but also provides the direction of attention for corporate governance and supervision in practice.