The Research On Effects Of Environment Uncertainty And Internal Control Quality On Earnings Management

In recent years,the financial fraud and earnings management cases of listed companies have become more frequent,which harming the interests of investors and the orderly development of the capital market.Especially under the challenge of the changing of the external environment such as technology,competition,market.Enterprises face more frequent fluctuations of earnings.The pressure of operation and performance is bigger for managers,they are more likely to take opportunism behaviors.Internal control as an important corporate governance mechanisms to moderate asymmetric information and improve the quality of accounting information,many scholars have proved that the internal control plays an important role on the inhibition of accrual earnings management.However,as the supervision means so as internal control increasingly rich,accrual earnings management was more likely to be found.The real earnings management with more concealment is favor by the managers.Choose the accrual management that is manipulated by the selection of accounting policy and the change of accounting estimates?Or the real earnings management of real transaction activities that diverge from the value of the enterprise?It will be influenced by both the advantages and disadvantages of the two approaches and the internal and external factors.Therefore,that in terms of the combination of the influence of external environment and internal governance to study the choice of the ways of earnings management will further enrich the research of earnings management,at the same time to give an important enlightenment for external stakeholders to attention surplus information and corporate governance.This paper is based on Information base,resource dependence,principal-agent and asymmetric information theory.On the basis of comparing the difference between accrual management and real earnings management,to discuss the internal logic relationship between environmental uncertainty and internal controls on both approaches.Through the empirical research methods,selecting China's Shanghai and Shenzhen A shares in 2011-2015 all non-financial listed companies as samples,the regression model is established and validated for the following three questions:(l)How the environment uncertainty have effect on the actual of earnings management and the real earnings management respectively?(2)What is the impact of internal control on the actual of earnings management and the real earnings management respectively?(3)Is internal control effective in suppressing the accrual or the real earnings management occurred by environmental uncertainties?The research results show that the higher environmental uncertainty will induce accrual earnings management,and its relationship with real earnings management instead.Good internal control can effectively inhibit accrual earnings management,but it is no use for real earnings management.Enterprises with high quality internal control tend to improving the internal control to reduce the effects of environmental uncertainty,alleviate the earnings management motivation.While low quality internal control intensify the accrual earnings management behavior under the condition of environmental uncertainty.Further studies have found that higher corporate environmental uncertainty are more likely to make positive accrual earnings management,and accordingly reduce sales control and production control of real earnings management.The significance of this paper are as follows:(1)Expanding the research perspectives of earnings management;(2)Provide a reference for the design of internal corporate governance and external supervision mechanism;(3)Reminding the user of the report to make an objective evaluation of the surplus information in the context of changes in the external environment of the enterprise.