A Study On Relationship Among Top Management Turnover, Succession Resource And Earnings Managenment

With the development of China’s securities market, the corporation’s earningsmanagement is increasingly subject to creditors, shareholders, securities regulatorsand other stakeholders concerned. In the development of China’s securities market, alarge number of changed executives is emergence. Especially in recent years,Executive turnover phenomenon is a very common in china.These executives turnovernot only brings the share price of the company, operating performance and personnelchanges, but also effect the long-term development of the company.So from my pointof view, In this background, Study on the behavior of earnings management inexecutives replacement has very important significance.Firstly,the paper were relatedto domestic and international review.We selected2005-2010Shenzhen and ShanghaiA-share corporations as a full study sample, obtained after screening the finalsample of7584data, the research method, select the modified Jones model to measureearnings management, while using correlation analysis and multiple linear regressionmethod, analyzed the relationship between executive changes, earnings managementand succession sources. Finally, the following conclusions:(1)In the changing year, top management turnover Bring about obvious negativeearnings management，But But compared with the ceoturnver, The chairman changenegative earnings management is more significant,which matches our country’s actual,In the principal-agent relationship formed In China’s listed companies,the chairmanis the key person.(2)In the changing year,informal turnover caused more significant negativeearnings management than formal turnover,in which Boardinformalturnover isobvious,howeverCeoinformalturnover is not.(3)In the changing year，For the successor sources, when the successor comesfrom inside, negative earnings management is more serious.This is different to thePrevious studies. The reason may be the Internal successor know more about thesituation of enterprises than outsider successor,so Earnings management is moreeasier for them.(4)The year after the change, the successor executives increase profitability ofcorporation through positive earnings management, showing their business skills andcontribute to the improved performance of the company is stronger than the formerexecutives, and chairman of the board is key of positive earnings management. Finally, based on the above conclusion, separately from the corporate governance,policy regulation, audit independence,we put forward the corresponding policysuggestions.