Research On The Influence On Executive Compensation To Accounting Information Quality

Executive compensation and accounting information quality is focusissue at home and abroad. Executive compensation is an important contentof corperation management and the important constituent part ofaccounting information. Therefore, accounting information quality dependson whether executive compensation is reasonable or not. This paper aims atthe impression on executive compensation to accounting informationquality, its purpose is to prove whether there is the impression betweenthem and it adopted three researching methods. They are qualitative andquantitative investigation and comparative analysis. The paper’s mainresearch content is as follows:The First part is introduction. In this part, we will get the researchingbackground, purpose, content and train of thought. The Second part isdocument summary. Based on level of executive salary is the final contentof compensation contracts, this paper used indirect and direct dimension toresearch and summed up two aspects of documents of the influence ofaccounting information to the action of executive in accounting and theinfluence of remuneration contracts to the quality of accountinginformation. With researching present situation at home and abroad, thispaper chosed the impression on compensation contracts to accountinginformation quality as researching content. The third part is theoretical analysis. From the basic content of executive compensation andaccounting information quality, the paper used Impression managementtheory, Incentive theory and Principal-agent theory to interpret theimpression on executive compensation to accounting information quality.The fourth part is positive analysis. This paper adopted the all sample datasof companies in shanghai and Shenzhen stock markets from2007to2011,after reform of non-tradable shares, as researching object, made thecomprehensive indexes of accounting information quality from the viewpoint of reliability, timeliness and relativity and used the methods ofdescriptive statistics, relativity analysis, regression analysis to prove theimpression on executive compensation to accounting information quality.The final part is conclusion and the disadvantages.With the help of Impression management theory, Incentive theory andPrincipal-agent theory, this paper analysed the result of empirical study andworked out the main researching conclusion: under the same condition, allthe total amount of annual executives compensation, the managers and theinternal directors’ pay are positive correlated with accounting informationquality obviously. That is to say, executive compensation incention ishelpful to accounting information quality. Finally, based on the aboveresearch results, combined with relevant theory, the paper puts forwardpolicy Suggestions about designing Reasonable compensation, and pointsout the future research direction.