The Impact Of Ownership Structure On Earnings Management

With the constant improvement of China's capital market,investors have put forward new requirements of quality and transparency to the listed companies' earnings information.Earning information can reflect the implementation of fiduciary duty,also is the main decision-making basis of external stakeholders.As a kind of accounting activity and management behavior,earning management can reduce the reliability of accounting information and the degree of information to users' trust.Due to the lack of perfect and mature governance structure,enterprises would manipulate its earning information.And ownership structure is an important part of governance structure.Therefore,it is necessary and practical to study the impact of share composition on earnings management and discuss how to improve the equity structure in order to reduce earnings manipulation.This paper adopts normative and empirical research method and the article is divided into five parts.Chapter 1 is the introduction.This part firstly explains the background,purpose and significance of this research.Then it defines relevant concepts.Finally,it adopts normative research method to review the research literature on earnings management and ownership structure.This part also summarizes the research content and logical structure.Chapter 2 analysis the present situation of listed companies' ownership structure and earnings management.This part summarizes the data of 2004-2006 and 2013-2015 of the Shanghai A-share listed companies to analysis the current situation of ownership structure and earnings management.Chapter 3 is the empirical analysis of earning management.This part firstly reviews metrics related to earnings management model at home and abroad and explains the measurement model of earnings management of this paper.Then it adopts financial data of Shanghai A-share listed companies from 2013-2015 as a sample to estimate the degree of earning management.Chapter 4 is the empirical test of equity structure and earning management.Firstly it takes the degree of earnings management as dependent variable and equity structure as independent variable.Then it studies the influence of share composition on the control of earning by regression model.The empirical results show that the ownership concentration,equity liquidity and equity balance degree are negatively related to earnings management;As to equity structure,the ownership of state-owned shares and legal person ownership are related to earnings management;managers and employee ownership and institutes' ownership are negatively related to the earnings management.Chapter 5 is results and suggestions.Firstly it summaries the results according to empirical test in chapter 4.Next it puts suggestions from improving the ownership structure and perfecting the law and policies.Lastly it points out the shortcomings of this paper and gives a outlook to further study.This paper is featured on the research angle and the practical value.It joins cost and offline project in Lu Jianqiao model to estimate the degree of earnings management;The regression model fully demonstrates ownership structure can affect earnings management,it is a feature of research angle.From the practical value,it suggests we can improve the quality of the surplus from increasing the balance of ownership,increasing liquidity and improving the system of information disclosure.