Research On Female Directors And Real Earnings Management

In recent years,a lot of research is turning to the relationship between women and accounting behavior,scholars generally believe that women have many special personal characteristics,such as lower risk appetite,a higher risk aversion awareness,lower self-confidence and a stronger sense of morality,let they can to correct the information bias of the company through different perspectives and methods,so female directors are adopting to restrained earnings management,and help companies to improve the efficiency of governance.As a typical accounting behavior,earnings management has great influence on the development of modern enterprises.Along with the gradual improvement of the new accounting standards and the continuous regulation of the securities market supervision system,the earnings management of the company becomes smaller,the cost becomes larger,so the practical application and theoretical research vision of earnings management has gradually turned to real earnings management.Academics generally believe-that the risk of real earnings management is much higher than the accrual earnings management,so the real earnings management activities that managers took for some purposes may damage the interests of investors and the company’s long-term interests.In order to alleviate this kind of agency conflict,it is necessary to strengthen the supervisory and incentive functions of the board.A lot of research at home and abroad also shows that the diversification characteristics of board,especially gender diversification,promote the balance and independence of the board,so as to promote its function.The addition of female directors has promoted the development of gender diversity on the board and reduced the information asymmetry on board level.On the other hand,female directors can improve the efficiency of board meetings more diligently,so female directors can improve the governance effect of the board,restrain enterprise earnings management behavior,and ultimately improve the earnings quality of listed companies.In addition,based on the high-echelon theory proposed by Hambrick and Mason in 1984,some scholars have studied the characteristics of senior managers such as gender,age,educational background and so on,and found that different characteristics of executives also have different effects on earnings management.Based on the above analysis,this paper explores the relationship between female directors and real earnings management from the perspective of women,and further examines whether women directors have financial background and political background to the impact of real earnings management.Taking into account the different nature of the impact of the enterprise,we divides the sample into state-owned enterprise and private enterprise group by the nature of the enterprise,examined the relationship of women directors and have financial background women directors and real earnings management respectively,but the author dose not test on the reliability of the female directors in the political background,because the state-owned enterprises itself have a tremendous political connection and the test does not have comparability.In the end,this paper made a series of robustness tests,in order to provide a robust and reliable conclusion.This paper is divides into five parts.The first part introduces the significance,methods,innovation and characteristics of the paper,and reviews the domestic and foreign literature on female directors and earnings management.The second part is the theoretical basis,mainly related to the concept of the paper is defined,such as the principal-agent theory.echelon theory,human capital differences and individual cognitive level theory and resource-based theory,ect.The third part is the theoretical analysis and hypothesis.Based on the analysis of female executives and earnings management of listed companies in China,this paper analyzes the influence of female directors on real management and puts forward the hypothesis.The fourth part is the empirical research and analysis,using the model of Roychowdhury(2006)and Cohen et al.(2010)to calculate the real earnings management data as the dependent variable,and take all the A-share listed companies in Shanghai and Shenzhen stock as a study sample,to test of female directors and their characteristics on the impact of real earnings management empirically.The fifth part is the conclusions and recommendations,the results shows that:(1)the presence of female directors on the board does have a significant effect on restraining real earnings management;(2)the presence of financial background female directors on the board does have a significant effect on restraining real earnings management,rather than the presence of non-financial background female directors has a significantly positive relationship to the real earnings management;proving that the the main reason female directors can not suppress the real earnings management level is that the non-financial background female directors has played the promotion role;The political background female directors was significantly negatively correlated with the real earnings management,while the non-political background female directors was positively correlated with the real earnings management degree,but not significant,suggesting that political background female directors have significantly improved the level of true earnings management.The theoretical significance of this paper is to expand the theoretical research on the relationship between gender diversity of the board and real earnings management,enrich the literature on the characteristics of female directors,and provide empirical evidence for the application of the echelon theory in accounting behavior.The practical significance for corporate governance,especially the governance of boards is put forward useful practical advice of the board,which the board of companies should consider increasing the participation of female directors,especially those with financial background.