The Effect Of Ownership Structure On The Quality Of Accounting Information

Effective mechanism of corporate governance, on one hand, can guarantee that the minority shareholders get reliable and true information about company's investment value, and will not be cheated and manipulated by the large shareholders; on the other hand, it can effectively encourage managers to maximize company's value, therefore to produce the reliable information about the listed company. Corporate governance structure has important impact on the information disclosure of the listed companies. And the ownership structure is the foundation of property right, the most crucial part of company's corporate governance structure. Hence it determines the efficiency of corporate governance to a great extent. This paper has probed into the influence of ownership structure to earnings'value relevance ---most important information quality attribute of earnings. Based on the extant studies about corporate governance and informativeness of earnings, this paper summarizes the methods and conclusions on the positive studies from the point of ownership structure and structure of board of director. From the point of supply and demand of accounting information, this paper puts forward the framework of the impact of ownership structure on accounting information quality. The diversity of ownership structure determines the degree of separation of ownership and management, thereby the status and rights entrusted to the shareholders. This paper studies the influence of state shareholders, corporate shares, circulating stocks, and institutional investors, the degree of shares concentration and balance on the earnings'value relevance. This paper offers the positive evidence for the proposition that ownership structure influences the quality of accounting information. The findings of paper are that proportion of circulating stock negatively impact the earnings'value-relevance, institutional equity ownership negatively impact the earnings'value-relevance, while the degree of concentration of shared positively effect earnings'value-relevance. But the proportion of shares owned by state and corporate, the balancing degree of equity ownership cannot significantly affect earnings'value-relevance. These evidences are consistent with the views that the minority shareholders is not rational enough to be the main demander of stock market; institutional investors are active shareholders and information seekers; while large shareholders can play an active role on corporate governance. Besides, the research of this paper also find that the cut-apart of equities has caused poor efficiency of china's stock market, demolished the cultivation of value-oriented investment consciousness of investors. The existence of a large number of non-negotiable stocks has caused the absence of demanders of accounting information, which seriously influence the quality of accounting information. The speculation atmosphere is still dense, and functional fixation still exists. The investors can not see through the quality of accounting information, not distinguish permanent and temporary earnings, but focus on the figures provided by listed company. This paper also offers the positive evidence about the effect of corporate governance on accounting information. The results suggest that the act of the negotiation of all equities is playing an important role in improving firm reforms and the effectiveness of corporate governance, the cultivation of demanders of accounting information is crucial for the improvement of accounting information...