A Research On The Relevance Of Board Characteristics And Earnings Management

Modern Corporate ownership and control in the separation of them led to the senior management personnel managers to achieve their own purposes often to do the different levels of earnings management behavior. Pass false to the outside world of financial information, which will mislead shareholders and investors, and further damage the public interests. In theory, the establishment of effective corporate governance mechanism will contain management earnings management through financial means, and the Board as a limited liability company's business implementation and business activities the competent authorities, in company organization plays an important role. Therefore, this article using our A shares listed companies in the manufacturing industry data for 2008 Board of Directors of listed companies on the regulatory effectiveness of earnings management.This review describes the related research, based on a representative Listed Companies Annual Report 2008 data as the research object, through the sub-sector cross-section modified Jones model to estimate the manipulation of listed companies in the absolute value of accruals as an earnings management index level of measurement, the definition of the four explanatory variables (board size, the proportion of independent directors, two jobs-one situation and the number of board meetings) to describe the characteristics listed on the board, and then using independent sample t test and multiple regression analysis, from an empirical point of test board characteristics and earnings management relevance. The empirical results show that board size, proportion of independent directors, chairman and CEO, whether the two level-one situation and handling accruals significant correlation exists between the relationship, only the Board of Directors meetings and earnings management was negatively correlated. Finally, based on the above findings, the board of directors of listed companies in China is put forward for four rationalization proposals.