Empirical Study On The Influence Of Management Characteristics On Earnings Management Of Listed Companies

The authenticity of accounting information of listed companies is a key factor in thehealthy development of the capital market. Earnings management behavior seriouslyimpact on the quality of accounting information of listed companies. So it is essential toconcern about earnings management behavior of listed companies in ensuring the healthyoperation of China’s capital market. In China, management characteristics of listedcompanies is closely related to earnings management. So researching on the influence ofmanagement characteristics on earnings management of listed companies, analyzing of itscauses, proposing appropriate comments, is to reduce earnings management behavior andimprove the quality of accounting information of listed companies has importantsignificance.This thesis describes the relationship between management characteristics andearnings management, combined with China’s Shanghai A-share listed company, selectsmanagerial stockholding level, management compensations, management equity incentiveratio, proportion of independent directors, chairman and general manager of two grade–one, political association, management age, male ratio as independent variables.Company size, asset-liability ratio as control variable. Using the modified Jones model tomeasure the extent of earnings management. Respectively, based on cross-sectional dataand panel data the thesis has taken the empirical study on the influencing of managementcharacteristics on earnings management of listed companies. In the cross-sectional dataanalysis, the thesis screened Shanghai A shares640listed companies as samples, conductresearch using multiple regression method. In the panel data aspect, the thesis selected562listed companies during the five years from2008-2012were2810sample values,regression analysis using Eviews software.After empirical study the thesis has the following conclusions: whether based oncross-sectional data or panel data, managerial stockholding level, managementcompensations, political association have passed the1%significance level test, proportion of independent directors have passed the5%significance level test, managerialstockholding level and political association are positively correlated with the level ofearnings management, management compensations negatively correlated with the degreeof earnings management. In the cross-sectional data analysis, proportion of independentdirectors negatively correlated with the degree of earnings management. Adding timefactor, in the panel data aspect, proportion of independent directors positively correlatedwith the degree of earnings management. In the panel data aspect,at the same time,chairman and general manager of two grade–one, management age have passed the1%and5%significance level test respectively.According to the conclusion,the thesis proposed to recommendations of reducingearnings management behavior.