Empirical Study On The Influence Of Financial Independent Directors On The Real Earnings Management

With more upgrades on regulation and continuous improvement of the accounting standards,the space of traditional accrual earnings management is narrowed while the real earnings management is becoming more and more popular among the managers.The real earnings management manipulates the surplus through the transactions which deviate from the optimal arrangement of the enterprise.Not only does the real earnings management affect the book accounting information,but it can also have a real negative impact on the company's long-term performance.However,previous studies on earnings management have more focused on accrual earnings management,less on the real earnings management whose research is urgent,especially on supervision and restriction mechanism.Other studies have demonstrated that the independent director system can effectively improve the company's governance and restrict earnings management.As a special part of independent directors,financial independent directors are both independent and professional,who can play a supervisory role better.This thesis takes manufacturing listed companies on the main board of Shenzhen Stock Exchange from 2013 to 2015 as samples,and does empirical research on the influence of financial independent directors on real earnings management.This study finds that the overall size of financial independent directors is negatively correlated with real earnings management,and practical financial independent directors are more effective in suppressing real earnings management.It further finds that financial independent directors,who work with too many listed companies will undermine their inhibitory effect on real earnings management.What's more,the results show local financial independent directors are negatively related to real earnings management.At last,this thesis provides some suggestions for the appointment of financial independent directors of listed companies,to improve independent director system and the corporate governance structure,to restraint real earnings management behavior and improve the quality of financial information,to protect the interests of all shareholders.