Corporate Financialization,Internal Control And Earnings Quality

In the current days,the trend of economic financialization has become more and more hot,which has led to the continuous increase of the frequency of corporate financial activities.Listed companies in China's non-financial industry are increasingly participating in financial activities,investing in financial assets,and their financial assets have risen sharply.Non-financial companies invest large amounts of money in financial assets and expect to obtain higher investment returns to improve their shortterm business performance.However,the increase in the degree of financialization of non-financial companies may adversely affect the quality of earnings of enterprises.At present,there are few literatures that directly study the relationship between the degree of financialization of non-financial companies and the quality of their earnings,and there is no literature that discusses the role of internal control in them,which has caused people to pay attention to the financialization of non-financial companies while ignoring their impact on earnings quality and the role of internal control.It also makes people underestimate the negative impact of non-financial corporate financialization and neglect measures to improve the quality of corporate earnings by reducing the degree of financialization.Based on this,this paper takes the 2008-2017 Shanghai-Shenzhen A-share nonfinancial listed companies as the research object,measures the degree of financialization by the financial asset holding rate,measures the earnings quality with the total real surplus management,and establishes a multiple regression model.Exploring the relationship between the degree of financialization of non-financial enterprises and the quality of earnings and the role of internal control quality in the relationship between the two.The results show that the higher the degree of financialization of non-financial enterprises and the lower the quality of earnings of non-financial enterprises.As for the negative impact of the degree of financialization of non-financial enterprises on their earnings quality,the low-quality internal Control will hardly weaken the negative impact,and high quality internal control will have a weakening effect on the negative impact.After changing indicators that measure the degree of financialization and the quality of earnings to do regression analysis,the above conclusions are more stable.