Empircal Study Of Private Enterprise Corporate Governance Structure And Accruals

Corporate governance is a critical issue for the development of private companies. In recent years, the number of China's private listed companies growth rapidly. However, investors lack of confidence on them because of information asymmetries and imperfect system. As a result, the long-term development of private companies has been limited. Finance situation is affecting investors as an important factor in the decision-making, while the earnings management inspired by corporate governance. Therefore, it's valuable to research corporate governance of China's private companies from the perspective of accruals.This article aims to explore the impact of corporate governance on earnings management of China's private listed companies, thus revealing a more effective governance structure that is conducive to enhance the usefulness of finance information. Rational governance structure should improve quality and competitiveness, enhance the protection of small and medium shareholders, as well as strengthen the communication between the listed companies and invertors.In the first of this paper, I review the relevant literature and commentary in detail, including the situation and defects about corporate governance of China's private companies, the research of characteristics about corporate governance, and the relationship research about corporate governance and accruals. All of these laid the follow-up study of this paper.Then, this paper takes all private companies listed in Shanghai and Shenzhen stock exchange from 2003 to 2008 as samples. The paper does the research about the impact of corporate governance on earnings management from the following two aspects:(1)through statistical analysis, summarized the governance structure characteristics of China's private listed companies, including ownership structure, board of directors, management and the external takeover market;(2)using principal component analysis to make a composite index of corporate governance-G index, using the extended Jones model to predict discretionary accruals, using regression analysis to explore the impaction of G index on accruals. In addition, the paper compares the level of corporate governance of private manufacturing enterprises and state-owned manufacturing enterprises in order to explore the difference of the two kinds of companies, and provide a basis for improve corporate governance of private companies. Finally, the author summarizes all the research findings and gives some suggestions to improve the governance structure of private companies, as well as some advice about strengthen controlling.