Reputation Of Accountant Firm,Sponsor Institution And IPO Real Earnings Management

Recently,after IPO companies listed,the inner performance getting "sudden changing face" has become so common in China's capital market,Since IPO business has listed,whose management performance of the decline has significantly influenced interests of investors(especially of those small and medium investors),as well as resulting in severe damages to the aim of improving the Healthy capital market balance.Therefore,the supervisory agencies such as SFC and other pay more acute attention on the IPO business financial quality.In order to improve the reliability of IPO financial report and also to curb IPO earnings management,based on the existing CPA audit supervision mechanism,it is to make further step for increasing the recommendation mechanism of sponsor institutions to IPO enterprises.Based on this,this paper aims to analyze whether the CPA audit system and the securities company's sponsor system suppress the earnings management activities of IPO listed companies,thus forming a double insurance for the reliability and authenticity of the financial statements of listed IPO companies.First of all,this paper combs existing domestic and foreign research literatures that account for the reputation of accounting firms and of the sponsor institutions on the earnings management,Meanwhile,based on the principal agency theory and reputation theory on the accounting firm and sponsor institutions involved in IPO system background and internal logic we make an Elaborate discuss and deep analysis.The theoretical analysis shows that under the principal-agent relationship of the modern enterprise,the auditing system of the accounting firm and the sponsor system of the securities company will equally supervise the financial report quality of the IPO listed companies and protect the investors' interests.Moreover,the accounting firm and the sponsor institution make a guarantee for the IPO business by their own reputation,the higher their reputation,the more obvious the role of supervisionSecondly,this paper chooses the listed companies of Shanghai and Shenzhen IPO in 2004-2016 as the research sample,and choose that whether the accounting firm is the top ten and the securities company the top ten used as the proxy independent variable of its reputation,And The IPO level of earnings management before it has listed one year was used as the dependent variable,and the multiple regression model and the(adjustment/moderated)effect model were used for empirical/validation test.The results show:(1)The reputation of accounting firm have a negative relationship with real earnings management of IPO companies;(2)The reputation of sponsor firm have a negative relationship with real earnings management of IPO companies.(3)No evidence find that there are a combined effect of sponsor and accounting firm on real earnings management of IPO companies in the year of T-1,but this combined effect of sponsor and accounting firm on real earnings management of IPO companies in the year of T-2 and T-3 are significantly related.(4)State-owned enterprises and main board listed companies mainly use real earnings management to adjust the profit,but we did not find evidence that sponsor and accounting firm have a inhibiting effect on this.Finally,this article originating from the fresh perspective of the sponsor institutions makes further understanding and thinking about corporate earnings management issues.In this paper,the research has broadened the existing research literature with regard to curbing the IPO earnings management mechanism system,provided new empirical evidence to improve the IPO market and improve the reliability of the IPO financial report,so as to provide the policy system,the sponsor institution,and the certified public accountant institution as well as enterprise management and other multi-party to provide decision-making assistance.