Institutional Investor Ownership, Internal Control Quality And Earnings Persistence

The group of institutional investors keeps growing,the scale of shareholding continues to expand,and the types of institutions are increasingly diversified.Once institutional investors carry out active and effective supervision over the companies being held,it will help to improve the long-term value of the companies,protect minority shareholders and regulate the capital market.As one of the perspectives to measure the quality of earnings and the quality of accounting information,earnings persistence can reflect the expected future situation of earnings,and reflect the sustainable development ability of enterprises from one aspect.However,the phenomenon of low earnings persistence of listed companies still exists in reality.Based on this,this paper aims to verify the actual attributes of institutional investors in China's market,the impact of their shareholding behavior on earnings persistence and whether the quality of internal control plays an intermediary role in the relationship between them,and adopts a research method combining literature research and empirical analysis.First of all,on the basis of expounding the research background and significance,this paper systematically summarizes and reviews the research results on institutional investor ownership,internal control and earnings persistence at home and abroad,providing references for the research of this paper.In addition,by defining the concepts of institutional investors,internal control quality and earnings sustainability,the main contents of relevant theoretical basis are elaborated in detail,which lays a theoretical foundation for the hypothesis of the following research.Secondly,the A-share main board listed companies from 2013 to 2018 were selected as research samples to build a model of the relationship between institutional investor ownership,internal control quality and earnings persistence.The research hypothesis of the impact of institutional investor shareholdings on earnings persistence and the mediating effect of internal control quality is put forward,and an empirical analysis is carried out.The results show that the higher the shareholding ratio of institutional investors is,the greater the sustainability of earnings is and the higher the quality of internal control is;The quality of internal control is an intermediary variable that of institutional investor ownership positively affects the earnings persistence,that is,institutional investors can enhance the earnings sustainability by improving the quality of internal control.Finally,based on research results,this paper proposes relevant policies and suggestions to enhance the earnings persistence of listed companies from the two perspectives of enhancing the shareholding utility of institutional investors and improving the quality of internal control.