The Research Of The Relativities Between Earnings Management And Corporate Governance

Earnings management is an important area of the modern accounting research, which has about 20 years' history abroad. But the research is just beginning in China. Moreover, the literature about the research of the relativities between earnings management and corporate governance is especially rare.Literature research suggests that two factors (stimulating factor & opportunity factor) bring earnings management. The providers of the accounting reports have various motivations of earnings management, which are stimulating factors. For instance, management reward, financing in capital market, political cost, manager market and so on. The opportunity factors of earnings management are accruals accounting, accounting rules' faultiness and asymmetric information. The system of modem accounting report has many earnings management opportunities. For instance, accruals accounting, forecast, discounting and big bath are the important instruments of earnings management. At the same time, because of the more complication in the modern business and finance, it is more and more difficult to estimate the accounting proceeding.In fact, the two factors, which bring earnings management, directly correlate asymmetric information. Asymmetric information blocks the information communication and then brings agent problem. Manager has personal information, which is difficult to be known by trust or other group. Therefore, corporate governance directly affects the degree of earnings management. If the corporate governance system stimulates earnings management, earnings management action occurs or more seriously occurs, and vice versa.This thesis chooses 804 companies from Chinese listing companies as the research object, collects 2002-2003 years' finance and corporate governance data of these 804 companies. The purpose of the thesis is testing the relationship between the degree of the earnings management and the corporate governance factors. The testing method is regression analysis and comparing analysis.The main content of this thesis is following:Chapter one surveys the previous researches on the concept of earnings...