Transfer Of Control,departure Of Independent Directors And Earnings Management

This paper analyzes the influence of controlling shareholders on the supervision of independent directors by exploring the transfer of control rights of enterprises and the departure of independent directors,combined with the degree of earnings management of enterprises.So as to provide more perspective for investors or potential investors and analysts to explore corporate governance,and bring new thinking to independent director system at the same time.Based on the data of independent director level and company level of 3159 enterprises in 2008---2017,this paper firstly explores the transfer of control rights and the departure of independent directors.After excluding the influence of objective term of tenure,this paper discusses the relationship between the transfer of control rights and the departure of independent directors.It is found that there is a significant positive correlation between the transfer of control and the departure of independent directors,which indicates that independent directors are more likely to leave office when the controlling shareholders change.Secondly,this paper uses the sample at the company level to test the degree of earnings management,and finds that when the transfer of corporate control and the departure of independent directors occur at the same time,the degree of earnings management of the enterprise is higher.It shows that the controlling shareholder seriously affects the function of the independent directors,which leads to the independent directors can not effectively supervise the manipulation of the profits of the enterprise.The results of this study further show that when an enterprise is a state-owned enterprise,there is no significant correlation between the degree of earnings management and the transfer of control and the departure of independent directors.It is shown that there is no significant correlationbetween the earnings management behavior of state-owned enterprise management and the change of controlling shareholders and independent directors,and the operating performance in the period of change is relatively reliable.Further research also found that accounting type and economic management type have a strong ability to discriminate earnings management behavior of enterprise management,but the independent directors of accounting type and economic management background are greatly affected by the controlling shareholders of the enterprise.The supervisory role of the two types of independent directors will be more susceptible to interference,making it difficult to express their views.Therefore,if enterprises can effectively guarantee the independence of independent directors of accounting and economic management,then they will effectively reduce the degree of earnings management and make the financial information of enterprises more authentic and reliable.