Research On Earnings Management Based On Control Right Transfer Of Listed Company

As we all know,the transfer of control is one way of acquisitions,and the purpose of control transfer is for different stakeholders to compete for the management of the corporate.However,when the transfer of control occurred,the major shareholders based on the control authority will seize the last chance to pursue private interests by the way of collusion with the purchaser.A feature of listed companies in China is that state holding has a large proportion,which accounted for about 44% of the total number of listed companies.However,state-owned enterprises are faced with the issues of low management efficiency and performance compared with private enterprises.but the activity of control transfer can ease the low resource utilization of enterprise reduce costs due to the principal-agent problem arising.However,the transfer of control involves replacement of major shareholders,and the executives in order to avoid be replaced tend to seize last personal interests at the expense of the interests of the seller.As the state-owned enterprises and private enterprises have different problems of agency,so earnings management way based on State-controlled listed companies and Private holding listed companies is not the same before control transfer.So it is of great significance to study the relationship between control transfer and earnings management of different ownership property of company.In order to verify the relationship between control transfer and earnings management of listed companies,the paper selects the different nature of enterprises from A share market among 2010 to 2014 as the original sample,and put the transfer of control of the company before a sample years,year after year as the selection period.I study the relationship between the control transfer and earnings management from the perspective of ownership of the properties,and make assumptions based on theoretical analysis:(1)When the State Holding Listed Companies transferred to a private holding listed companies,state-controlled listed companies tend to have negative earnings management before the year of transfer of control(2)When a private holding companies transferred the control to state-controlled listed companies,private holding companies would carry forward earnings management.Based on the conclusion.This paper proposes some recommendations:(1)the relevant departments should strengthen the supervision of control transfer.(2)the Ministry of Finance should further to improve the level of accounting standards to curb behavior of earnings management.(3)CPA should play roles to the inhibition of earnings management.The main contribution of this paper is reflected in the following aspects:(1)Although there are many scholars researching on earnings managment,such as from the perspective of a public company,directional issuance,public issuance,etc.but current research literature from the perspective of control transfer is less.(2)In this paper,I study behaviors of transfer control of different nature of equity with earnings management in the process according to different buyers.This paper is divided into six parts.The first part is the introduction,which puts forward the research background,research ideas and the framework of the thesis.The second part is the literature review at home and abroad.Classified,the reasons for the transfer of control rights of Listed Companies in China and impact of transfer of control on the major shareholders and corporate performance.The third part describes the concept of the transfer of control right,the theoretical foundation and the way of earnings management,which provides a theoretical basis for the next chapter.The fourth part is the analysis of corporate control right transfer and the relationship between earnings management theory,and explain the relationship between the two from the theory,and put forward two hypotheses: Hypothesis 1,When the State Holding Listed Companies transferred to a private holding listed companies,state-controlled listed companies tend to have negative earnings management before the year of transfer of control.hypothesis 2,When a private holding companies transferred the control to state-controlled listed companies,private holding companies would carry forward earnings management.Based on the conclusion.The fifth part is the empirical analysis of the relationship between the transfer of corporate control and earnings management,using descriptive statistics and multiple linear regression analysis to test the hypothesis.The sixth part is the conclusions and policy recommendations,and pointed out the lack of research in this paper.