The Annual General Meeting And Corporate Earnings Management

Shareholders are the owners of the enterprise,and shareholders exercise their power at the meeting through the right to propose proposals and voting rights.In addition,the meeting is pretty important for corporate governance.In China,laws and regulations compulsorily stipulate that the time of the AGM,and China adopts a unified fiscal year,the time of the AGM is relatively fixed.It can be seen that under normal circumstances,the financial report recently disclosed before it should be annual reports or first quarterly reports,and the company can plan quarterly earnings management based on this.Due to the existence of agency conflicts,the company has an incentive to conduct quarterly earnings management before the AGM.This article aims to analyze the relationship between the nature of financial reports disclosed before the AGM of shareholders and quarterly earnings management,and furher explore the relationship between equity concentration,institutional investors’ shareholding under this event window and the company’s quarterly earnings management behavior.This paper uses the listed companies that held the AGM on the Shanghai and Shenzhen main boards from 2015 to 2017 as a sample to conduct an empirical study.The results show that before the AGM,when the latest financial report disclosed is the first quarterly report,the higher the level of earnings management and the upward trend;the higher the concentration of equity,the greater the upward trend of quarterly earnings management in the first quarter report disclosed before the company’s annual shareholders meeting,while institutional investors’ holdings will inhibit this Upward trend.This article provides a new perspective to study the relationship between equity concentration,institutional investor shareholding and earnings management,and further confirms the existence of the second type of agency problem and the encroachment of small and medium shareholders by large shareholders.It also provides evidence for policy makers to formulate policies,which has positive practical significance on practical issues such as optimizing corporate governance,improving the institutional investor system,and protecting small and medium-sized investors.