Research On Internal Control, Corporate Governance And Earnings Management Of Listed Companies In Manufacturing

Whether it is a few years ago foreign the Enron Incident,world communications accounting scandal,Xerox fraud,Merck report fraud case,or in recent years of China,purple Xin Pharmaceutical fraud,hail branch fraud by the investigation,three new material due to financial fraud by the Shanghai disposition,*ST Bo Yuan was due to fraud compulsory delisting,this series of events to the accounting information distortion problem once again pushed up in the teeth of the storm.Earnings management is one of the important manifestations of accounting information,which has attracted the attention of scholars both at home and abroad.However,earnings manipulation of listed companies has been repeated.At the same time,the manufacturing industry is an important component of the national economic development,and its healthy development is related to the national economy and the people's livelihood.Vaclav Smil,one of the world's leading thinkers,once said that the prosperity and development of any advanced economy in the world can not be separated from a strong manufacturing system and the employment opportunities it brings.China's manufacturing industry is the bridge of social and economic development,which has its own unique advantages in stimulating economic growth,promoting social transformation and solving the employment pressure of population.Its healthy development is the strong backing for the development of China's first and third industries".Therefore,this paper argues that it is necessary to study the earnings management of manufacturing industry from two aspects: internal control and corporate governance.This paper is based on the financial data of 1429 listed companies in A stock exchange of Shanghai and Shenzhen Stock Exchange from 2013 to 2015.To calculate the earnings management using the modified Jones model;dipop listed company internal control index to measure the quality of internal control selection;using principal component analysis method to calculate the comprehensive score of corporate governance of Sample Firms,which makes an empirical analysis on the relationship between internal control and corporate governance and earnings management among the three.The results show that(1)the internal control has a certain inhibitory effect on earnings management behavior;(2)corporate governance has a certain inhibitory effect on earnings management behavior;(3)the quality of the internal control can promote the inhibitory effect of corporate governance on earnings management management.In view of the above research findings,this paper provides some referential suggestions from two different perspectives of internal control and corporate governance,aiming at promoting the manufacturing industry in our country in a better and faster direction.