Research On The Relationship Between Executive Incentive And Earnings Management On Financial Listed Companies

Research on the relationship between executive incentive and earnings management has been a hot topic in the field of corporate governance and financial accounting.The government has introduced a series of measures on executive pay system reform recent years.Financial companies have played an important role in national economy.Financial companies have always received much concern because of its particular governance environment,the operating characteristics and high-risk.On the one hand,the financial enterprise executive incentive problem has always been highly attention,on the other hand,financial enterprise accounting information quality might made a series of important influences.However,the relevant theoretical research has not completely adapt to the realistic requirement of financial enterprises.Therefore,it's an urgent need to carry out the study of the theory of the relationship between earnings management and executives incentive of financial listed companies,helping to provide theoretical support and path selection for building the financial industry executives incentive mechanism and regulating the behavior of earnings management to provide theoretical support and path selection.The article selects 2010-2015 data of 42 listed financial companies,based on the related concepts and theoretical basis of interpretation and analysis,and taking deep analysis of the mechanism of the relationship between executive incentive and earnings management,thus put forward the corresponding assumptions,and making an empirical test for the above assumptions through correlation analysis,regression analysis and a series of empirical analysis method.Finally,in view of the empirical research results,put forward relevant countermeasures and suggestions,and point out the shortage of the article study and future research directions.In this paper,the research results show that: first,executive compensation and earnings management has significant negative correlation relationship,the higher executive pay is,the smaller the degree of earnings management.That is to say high executive pay is helpful to reduce earnings management behavior.Second,executive equity incentive of financial listed companies are positively related to earnings management,that is to say,a higher degree of executives shareholding may stimulate the occurrence of earnings management behavior.Third,due to the good company performance and perfect corporate governance structure,the company can more effectively play a role of executive incentive,thus reducing the degree of earnings management.For the empirical analysis conclusion,the paper puts forward the following three suggestions: first,optimize the executive incentive mechanism,making it to come in to play of institutional incentive constraints.Second,improve the internal governance structure,optimize the internal supervision effect.Third,improve the external supervision system,improve information disclosure transparency.