Research On The Impact Of Digital Transformation On Enterprise Earnings Management

In the context of the comprehensive integration of the digital economy and the real economy,digital transformation has had a profound impact on enterprise operation and management.Therefore,the study of the economic consequences of digital transformation has become a focus of academic concern.Existing studies mainly focus on the impact of digital transformation on investment activities and financing activities,business performance,corporate governance,while there is little research on the impact of digital transformation on earnings management.Digital transformation makes the business model innovation and decision-making system upgrade,which makes the governance mechanism more perfect,and then helps to restrain the earnings management of enterprises.In view of this,this paper studies the impact of digital transformation on enterprise earnings management and discusses the mechanism.The conclusion can contribute to a deep understanding of the economic consequences of digital transformation and provide a reference for the practice of suppressing earnings management.Based on the theory of information asymmetry theory,dynamic ability theory and principal-agent theory,taking the Shanghai and Shenzhen A-share listed companies from 2012 to 2020,this paper discusses the influence relationship,and function mechanism of digital transformation on enterprise earnings management.The study shows that the higher the degree of digital transformation,the lower the level of enterprise earnings management,that is,digital transformation can effectively suppress earnings management;the results of the mechanism inspection show that digital transformation reduces the degree of information asymmetry,improves the level of corporate governance,reduces the financial leverage,and then helps to restrain the earnings management.The results of the heterogeneity test show that the inhibitory effect of digital transformation on enterprise earnings management was more obvious in state-owned enterprises and enterprises with a lower shareholding ratio of institutional investors.The contribution of this paper is: first of all,this paper makes a supplement to the research on the economic consequences of digital transformation.The existing research on the economic consequences of digital transformation mainly focuses on the impact of digital transformation on enterprise business activities,investment and financing activities,etc.While there is little research about the impact of digital transformation on enterprise earnings management.This paper analyzes the impact of digital transformation on enterprise earnings management and enriches the research literature on the economic effect of digital transformation to a certain extent.Secondly,it clarifies the mechanism of digital transformation on the earnings management of enterprises and provides a theoretical basis for enterprises to make decisions on digital transformation and restrain earnings management.Thirdly,it further discusses the differentiated impact of digital transformation on enterprise earnings management under the heterogeneous conditions of property rights institutional investors and better regional digital environment,so as to provide more accurate suggestions for the practice of enterprises’ digital transformation and for the relevant policies issued by the government.