This paper is to explore ownership structure and corporate governance effecting on earnings management,especially on how to constrain executive compensation motivation to earnings management. We use five variables to ...
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This paper is to explore ownership structure and corporate governance effecting on earnings management,especially on how to constrain executive compensation motivation to earnings management. We use five variables to quantify various corporate governance mechanisms including ownership structure and executive compensation for 1024 listed firms sample from 2007 to 2008. We find that earnings management is positively affected by executive compensation motivation,while this influence is constrained by ownership concentration. This finding reflects the current situation of corporate governance in China. Therefore,such a significant relationship is useful to control level of earnings management and improve the China's capital market developing healthily,stably and harmoniously.
Since the internal control system governs an organization,laws and regulations are needed to safeguard the validity of the internal controls. The well-established theory and practice in the U.S.A. is a good reference ...
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Since the internal control system governs an organization,laws and regulations are needed to safeguard the validity of the internal controls. The well-established theory and practice in the U.S.A. is a good reference for China to develop its internal control regulations. China is now trying to integrate scientific management with internal control standards which will become a component of the law. This paper analyzes the statistical data and compares the impacts of the related regulations on internal control disclosures in America and China. It studies the differences in the impacts of the regulations implementations in both countries and the reasons for the differences. With a good understanding of the issues in China,the article proposes some ideas to improve integration and feasibility in developing Chinese internal control laws and regulations.
Previous findings that internal governance do affect the current earnings management in annual earnings can be verified without a well-specified benchmark for pre-managed annual earnings. Although the internal governa...
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Previous findings that internal governance do affect the current earnings management in annual earnings can be verified without a well-specified benchmark for pre-managed annual earnings. Although the internal governance is often used in testing the influence of earnings management,there is scarcity of evidence about the effects of external economic environment. We document systematic differences in earnings management across the universe of China's listed companies during 2007-2008,and empirically demonstrate that external economic factors surely influence the earnings management. We use the proxy variable-stock market volatility for external economic environment and test whether stock market volatility affects the earnings management,and whether the regional factors earnings management. We collect 2048 observations of China's listed firms. We model shifts in relationship of stock market volatility and earnings management. It is found that stock market volatility has a very significant positive effect on earnings management;even stock market volatility has a reversing-U curve relationship with earnings management. And the regional difference has a very significant positive effect on earnings management,especially in China's eastern area. The pervasive effect of this research suggests that the effect of stock market volatility should be explicitly modeled when analyzing corporate earnings management and decision-making.
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