An Empirical Study Of Corporate Governance On Accounting Transparency

The corporate governance structure has become an essential problem with the listed company fast developing. "Corporate Governance" refers to the mechanism of which the owners (shareholders) monitor and control the operators, that is, to set a system which can arrange the rights and responsibilities between the owners and managers reasonably. Moreover, it is the interior corporate governance made up of the general meeting of shareholders, board of directors, board of supervisors, managers and the characteristics of them.The stock structures in Chinese stock market are not of felicitousness. There is too much proportion of the state-owned shares which lead to excessive concentration of equity. Major shareholders and insiders control the board of directors, which makes the lack of independence of the board of directors. It is different to form an independent board of directors to ensure business decision-making mechanism efficient. The mechanism of encouragement and constraint on managers does not effect. The problems of insiders'contraling are ubiquitous. The product market, manager market contraling market are not efficient, which makes external administration structure not work.The above factors result in not transparent accounting information of listed companies in China and induce investors to lose confidence, which in much degree restricts the long-term development of companies. Because there is a reciprocal relationship between the governance structures and accounting information publication of companies, a wholesome governance structure could guarantee high-quality information publication by strengthening interior control, reducing opportunistic behaviors and weakening information asymmetry; on the other hand, real and comprehensive information publication could improve the governance structures. The transparency of accounting information has the following three aspects: Firstly, there is a clear, exact, formal, legible and popular accounting rule and related regulatory system of accounting information publication; Secondly, no matter for public sectors or private sectors, the accounting rules should be followed strictly; Thirdly, to report and publish exact information frequently. Therefore, it is meaningful and valuable, both theoretically and in practice, to discuss and analyze the characteristics of the governance structure of listed companies in China from the angle of the accounting information transparency. The transparent accounting information could help investors employ the rights as shareholders efficiently, help directorate carry out the responsibility of regulation, suggestion and approval on the decision-making activities of management, help the board of supervisors perform the responsibility of supervision, help managers run the corporation and is also an important basis for the incentive plan for management. The practices of transparent accounting information involve the following aspects: Firstly, the reliability of financial information is the emphasis of the financial information generation and, the transparency of financial information generation is the basis to realize transparent accounting information; Secondly, the publication of financial information emphasizes the relativity of financial information, which means the quantity sufficiency, the timeliness, the facileness through channels, and the transparency of financial information publication is the further requirement of the transparency of accounting information; Thirdly, the transparency of financial information, which emphasizes the serviceability of information for making decision, is the further development of the transparency of accounting information.This text aims at studying and probing into the impact on accounting transparency of corporate governance characteristic of the listed company in our country, thus reveal the promotion which is favorable to the accounting transparency of listed company, help to improve accounting information quality and strengthen governance characteristic. It is significative to improve one's own quality and competitiveness of the listed company which have rational governance. It is also meaningful to protect the interests of minority stock holders and to enhance the understanding between the listed company and investors.This paper discusses the influences of the governance structure characteristics of listed companies in China on the transparency of accounting information from empirical and theoretical angles. Firstly, this paper makes a summery on the related literature of the governance structure of listed companies in China, and analyzes the shortcomings of the literature, especially on the basis of empirical studies in this paper, the special characteristic differences between the governance structure of listed civil companies and listed state-owned enterprises in China. In the following part, the influence of the transparency of accounting information and the theoretical basis of the influences of the governance structure of listed companies on the transparency of accounting information is discussed. The related domestic and foreign literature of the influences of the governance structure of listed companies on the transparency of accounting information is summarized. Then, on the basis of related theoretical discussion, the fourteen research hypotheses induced logically from four aspects of the governance structure characteristics are put forward. Through twenty one variables reflecting the governance structure characteristics in four aspects, such as equity structure, directorate, supervisors, management, we analyze the differences of governance structure between listed civil companies and listed state-owned enterprises in China. According to the test results, the equity sizes of listed civil companies are much smaller than the sizes of listed state-owned enterprises; the directorate sizes of listed civil companies are also smaller than the sizes of listed state-owned enterprises; the percentage held by directors, supervisors and managers is higher of listed civil companies than that of the listed state-owned; the tend of managers contraling the baord of directors is in evidence in listed civil companies; the proportion of independence directors and the frequency of managers changing are higher. Then we have tested the multianalysis regression model, from the result of empirical study,we can conclude that: the the concentration of equity is negatively associated with the transparency; the proportion of tradeable stock is positively associated with transparency;the proportion held by supervisors and managers is not associated with transparency; The proportion of independence directors is positively associated with the transparency along with better independence directors system forming.With the above conclusions, we can find the directions to improve corporate governance. We can improve the effcte of the board of directors and the board of supervisors, advance the mechanism of encouragement and constraint on managers to consummate interal mixed corporate governance structure. we can establish the manager market, set up independence audit system and law system to consummate external mixed corporate governance structure. To enhance the transparency of the public company can criterion and consummate the capital market in China.Considering the limit of time and the amount of work, this paper has studied the impact of corporate governance on transparency unilaterally. In the further research, we hope to discuss the impact of transparency on corporate governance ambilaterally. Further more, there are feasibilities to choose more study methods and variables to investigate the relationship between transparency and corporate governance.