Research On The Relationship Between Controlling Shareholder's Equity Pledge And Earnings Management

In recent years,the controlling shareholders of SME board listed companies have more and more frequently used equity pledge to raise funds for the company.However,when the value of the pledged goods declines,the controlling shareholders will face the risk of control transfer and replenishment of the pledged goods,.Therefore,it will urge the listed company to manage its market value through earnings management to maintain the stock price to mitigate this risk.To this end,this article uses the Shenzhen Stock Exchange's small and medium-sized listed companies as sample data and combines the relevant institutional background to study the relationship between controlling shareholder equity pledge and earnings management.According to the research results,compared with small and medium-sized board listed companies that do not have pledge of controlling shareholder equity,small and medium-sized board listed companies that have equity pledged have a higher degree of real activity earnings management;It will weaken the positive correlation between the controlling shareholder's equity pledge and the degree of real activity earnings management;Therefore,internal and external regulatory agencies should improve the company's governance structure,strengthen the supervision of pledged enterprises' subsequent capital flows,and protect the relevant stakeholder's rights.