The Impact Of Accounting Information Quality On Corporate Governance: An Empirical Reaserch

With the development of modern corporate system, two hot issues have come into being,namely,corporate governance mechanism and the quality of accounting information. The two issues areconcomitant, promoting and restricting each other. Enterprises with a high level of governance will ensuretheir disclosure quality of accounting information. Similarly, Enterprises with good quality of accountinginformation improved their governance mechanism in order to achieve a higher level of governance.Consequently, they constitute an integral part of microeconomic operation of enterprises. Corporategovernance mechanism represents a company’s management and control level, which directly impact thehealthy development of listed companies and securities markets, and its degree of perfection restrict listedcompanies’ quality of accounting information. All these facts have been verified through the use ofdomestic and international norms and empirical research. At the same time, ample and real disclosure ofaccounting information will make corporate governance mechanism work better and improve the efficiencyof corporate governance, effectively allocating social resources. In a considerable number of documentsand studies, the author mainly illustrate the impact of quality of accounting information on corporategovernance through theoretical analysis and few empirical analysis of the quality of accounting informationon corporate governance are used, which became the biggest innovation of this paper.The paper is divided into seven parts to explore the impact of quality of accounting informationon corporate governance.The first part is an introduction, and mainly clarifies the research background, significance,innovation and deficiencies. Then the author summarizes the research results at home and abroad, revealscertain inspiration for this article, and introduces the research methods and research framework.The second part firstly defines corporate governance mechanisms and the basic concept of thequality of accounting information, and describes the theoretical basis of the commissioned agency theory,asymmetric information theory and contract theory as well as the use of these theories in this article.The third part theoretically analyses the role of the quality of accounting information in thedesign of management compensation contract and selection of indicators, as well as its role in performing the functions of the board of directors and in internal control system. The author then analyzes theinfluence of the quality of accounting information on corporate control market, managers market as well asthe debt market, so as to show the function of the quality of accounting information in the internal andexternal corporate governance mechanism.The fourth part is an empirical analysis, which is the focus of this paper. The use of the principalcomponent analysis method is to obtain corporate governance’s proxy variables. Then based on threeassumptions, the author verifies the impact of the quality of accounting information on corporategovernance and two formation mechanisms using a logistic regression model and a multiple linearregression model, and comes to the conclusion that the three assumptions are true.Based on theoretical and empirical analysis, the fifth part draws the conclusion as follows:high-quality accounting information could promote corporate governance to function effectively,reasonably allocate the resources, and thereby improve the level of corporate governance and play animportant role in board governance mechanisms, and management compensation contract mechanism.Finally, based on the impact of accounting information on corporate governance, the author puts forwardcorresponding recommendations considering the status quo of China’s development.