Research On The Effect Of Internal Corporate Governance On Accounting Information Quality From The Perspective Of Agency Cost

With the rapid development of Chinese economy, China has become the world’s second largest economy. Therefore, the quality of accounting information which has always been a research focus in theoretical circle has attracted the attention of practical circle. However, whether the moral quality of accountants is high or not and whether they have collusions with managers are the main reason for low-quality accounting information. Indeed, these problems are reasons for low-quality accounting information, but the root lies in the problems existing in the corporate governance. High-quality accounting information depends on the thorough corporate governance structure which may provide a good operating environment for the company and balance the power relations among shareholders meeting, board of directors, board of supervisors and managers. In this way, the company’s internal operation could be efficient and the quality of accounting information could be improved. Meanwhile, followed by the agency problems which were caused by the separation of two rights, the agency costs generated. For companies with different agency cost, the influences of internal governance are varied. Therefore, the research of how internal corporate governance affects the quality of accounting information from the perspective of agency cost is very significant.This paper classified and hackled previous literatures about the influence of corporate governance towards the quality of accounting information and the relationships among agency costs, corporate governance and the quality of accounting information. On this basis, this paper introduced the generation and the meaning of corporate governance, defined the concept of the accounting information and the requirements of the accounting information quality, besides, this paper hackled the currently existing problems of the accounting information quality and introduced the definition and the types of agency costs. Then this paper analyzed how internal corporate governance affects the quality of accounting information from the perspective of agency cost. In the empirical research, this paper selected the ownership structure, the characteristics of the board of directors and supervisory board as the variables of internal corporate governance, and measured the quality of accounting information by two features, that is, reliability and relevance. Next, this paper introduced a new variable to substitute the quality of accounting information and chose METS, OETS and STA to represent the agency cost. Using the method such as descriptive statistics, cluster analysis and binary logistic regression; this paper analyzed how internal corporate governance affects the quality of accounting information from the perspective of agency cost. Through normative and empirical research, this paper finally came to the conclusion that the difference of the agency cost will have the influence on the relation between corporate governance and the quality of accounting information., and ownership structure, the characteristics of the board of directors will influence the quality of accounting information. At last I made some policy recommendations. Optimizing ownership structure of listed companies, stable the size of the board, strengthen the functions of the supervisory board, clear recommendations corporate agency costs...