Real Earnings Management,Auditor Industry Expertise And Investment Efficiency

As an important resource allocation mode,investment not only plays an important role in the process of value creation of enterprises,but also affects the healthy development of the entire national economy.In the real capital market,the investment decisions of enterprises often deviate from the best scale and direction,and the phenomenon of low-efficiency investment is widespread.Therefore,in the context of the new normal economy,it is of great practical significance to explore how to improve the low-efficiency investment.Accounting information is closely related to investors' investment decisions.Investors often make project evaluation before making investment decisions.The basis of evaluation is mainly the various financial information provided by enterprises.The more accurately the accounting information reflects the financial situation of the company,the more it helps investors to conduct investment analysis and decision-making.However,earnings management will distort the real financial information,and aggravate the information asymmetry and principal-agent problems,which will have a negative impact on investment decisions of enterprises.At present,the research on the relationship between earnings management and investment efficiency has not reached a consistent conclusion,and these studies are basically based on the perspective of accrued earnings management.Few scholars have directly distinguished the direction of different manipulation methods of real earnings management to study its impact on investment efficiency.Real earnings management is very different from accrued earnings management in terms of control methods and economic consequences.It is necessary to further explore whether real earnings management has an impact on corporate investment efficiency.In addition,as an important supervisory and governance mechanism,the auditor industry expertise can discover various earnings management activities of enterprises and play a certain role in information governance.However,no scholars have studied its moderating effect on the relationship between real earnings management and investment efficiency.Therefore,this paper attempts to study the impact of different manipulation methods and directions of real earnings management on investment efficiency,and the moderating effect of auditor industry expertise on the relationship between investment efficiency and real earnings management.It has important theoretical and practical significance for enriching the research of earnings management and investment efficiency and improving the efficiency of enterprise investment.Firstly,this paper reviews the relevant research literature on earnings management,investment efficiency and auditor industry expertise,seeks a new research perspective,and determines research ideas of this paper.Then,on the basis of investment behavior theory,information asymmetry theory,principal-agent theory and insurance theory,the corresponding research hypotheses are proposed.Thirdly,this paper uses the data of the listed companies in Shanghai and Shenzhen A-share from 2013 to 2017 as a sample,and uses Richardson model and Roychowdhury model to estimate investment efficiency and real earnings management respectively.While auditor industry expertise is measured by dummy variables,and the factors such as ownership concentration,assets turnover,and capital occupation of big shareholders are controlled.Then this paper constructs regression models to test the effect of different manipulation methods and directions of real earnings management on investment efficiency and the moderating effect of auditor industry expertise on the relationship between investment efficiency and real earnings management.The conclusions of this paper are as follows:(1)In general,the higher the degree of real earnings management,the lower the investment efficiency of the listed companies.Different ways of real earnings management manipulation will lead to inefficient investment,but the degree of impact is different.From the regression results of the overall sample,the larger the real earnings management total index,the lower the investment efficiency of the listed companies;from the perspective of different manipulation methods,all kinds of manipulation methods will lead to inefficient investment of the listed companies,among which discretionary cost manipulation has the greatest impact on investment efficiency.(2)Compared with positive real earnings management,negative real earnings management manipulation is more likely to reduce the investment efficiency of the listed companies.After distinguishing the directions of different manipulation methods of real earnings management,the conclusion shows that the regression coefficients of negative real earnings management total index,sales manipulation index and production control index are significantly positive.However,in the sample of positive real earnings management,except that the regression coefficient of the discretionary cost manipulation index is significantly positive,the other real earnings management indicators will not significantly affect the investment efficiency,indicating that the negative manipulation of real earnings management is more likely to lead to inefficient investment.(3)Auditor industry expertise can significantly weaken the relationship between investment efficiency and real earnings management.In general,the intersection items of the real earnings management total index,production control index,discretionary cost manipulation index and auditor industry expertise are significantly negative.After distinguishing the directions of different manipulation methods of real earnings management,it is found that negative manipulation of real earnings management is more likely to reduce the investment efficiency of the listed companies.After further research,it is found that auditor industry expertise can weaken the relationship more obviously,which shows that auditor industry expertise can significantly weaken the negative impact of real earnings management on investment efficiency.In the robustness test,this paper reconstructs two comprehensive indicators of real earnings management,recalculates the auditor industry expertise based on the total assets of enterprises,and re-tests the model.The test results show that the conclusions of this paper are robust.Finally,according to the conclusions of this paper,the corresponding policy recommendations are put forward to reduce the low investment efficiency caused by the real earnings management behavior of listed companies,and point out the research limitation and future prospects of this paper.