Controlling Shareholder's Equity Pledge And Accounting Information Quality

Because the equity relationship is clear and liquid,and the shares do not need to be transferred during the pledge,the pledge does not affect the shareholders 'control and decision-making power.Therefore,the equity pledge business is favored by the capital market and has become an important option for shareholders to make financing choices.According to the latest data from Wind,as of March 27,2020,a total of 3001 controlling shareholders in Shanghai and Shenzhen have pledged equity,and the number of pledged transactions has reached 33,800,and shares involved is as high as 560.3 billion,accounting for approximately 7.75% of the total number of A shares;the pledged market value is 4.31 trillion yuan,accounting for approximately 10% of the total capital of A shares.However,with the gradual expansion of equity pledges,especially in the context of large fluctuations in the capital market this year,a large number of equity pledged stocks are facing the risk of liquidation,so the emergence of equity pledges has expanded financing channels for controlling shareholders,It alleviates the financing constraints,but it also leads to an increase in the risk of transfer of control rights,which in turn enhances the controlling shareholders 'motivation to stabilize the stock price through market value management.At the same time,the special national situation of “one share dominates” also makes the controlling shareholders not only motivated but also more capable to put it into action.However,whether these market value management actions will increase the controlling shareholder's manipulation of accounting information,whitewashing data,and selective information disclosure will lead to a decrease in the quality of accounting information.This is the main content of this study.By combing the existing literature on equity pledge at home and abroad,it is found that most research focuses on the motivation and economic consequences of equity pledge of controlling shareholders.Few scholars have linked equity pledge with accounting information quality,taking into account accounting information quality.It plays an important role in maintaining the stability and efficiency of the capital market.Therefore,it is of great significance to study the impact of controlling shareholder's equity pledge on the quality of accounting information.From the perspective of equity pledge,based on the principal-agent theory,information asymmetry theory and the theory of private benefits of control,this paper studies whether the equity pledge of controlling shareholders will affect the quality of accounting information of listed companies.By selecting the data of Shenzhen Stock Exchange A-share listed companies from 2015 to 2018 as the research sample,the method of combining theoretical research and empirical analysis is used to test the impact mechanism of the controlling shareholder's equity pledge on the quality of accounting information.According to the conclusions of the study,they put forward relevant suggestions from the aspects of internal governance and external supervision.The results of the study show that the listed companies with equity pledge of controlling shareholders have lower quality of accounting information compilation and disclosure of accounting information,and the higher the equity pledge rate,the stronger the negative correlation between the two.Problems,further research found that when shareholders of non-state-owned enterprises holding equity pledges,their opportunistic motives for earnings management and information disclosure management are stronger,and the quality of accounting information preparation and disclosure is worse.After the robustness test,these conclusions still hold.This article delves into the mechanism by which equity pledge affects the quality of accounting information,which not only expands the research content related to equity pledge,but also enriches the influencing factors of the quality of accounting information.It also provides a reference value for companies to implement reasonable equity pledge financing and improve internal control It also provides empirical evidence for the supervision department to supervise the equity pledge of listed companies and formulate relevant laws and regulations.