Excutive Characteristics, Earninngs Management And Efficiency Of Investment

The earnings management and investment efficiency of listed companies have been the popular topic in Chinese accounting and financial field. High quality of accounting information can improve the investment efficiency, while the earnings management aggravates the information asymmetry and accounting information distorted by agent cost which brings negative influence to investment efficiency. Recent years, with the development of capital market in our country, the phenomenon of listed companies glossing over surplus through earnings management and financial fraud emerge in endlessly, which lowers the quality of surplus. As a motivated, competent and characteristic top managers, no wonder they will affect the relationship between earnings and invest efficiency.The paper tries to discuss the relationship between earnings management and efficiency of investment based on the different characteristics of top managers. This paper chooses the financial data of China a-share listed companies from 2006 to 2014 for empirical research as the research sample. In the research, firstly, modified cross selectional Jones model is chosen to measure non-manipulative accruals which is used to measure the degree of earnings management; secondly, the paper chooses Richardson(2006)model to measure the efficiency of investment; at last, with the addition of top managers characteristics:age, sex, education and tenure, the paper makes empirical test to discuss the relationship between earnings management and efficiency of investment.The empirical results show that:(1)the earnings management is directly proportion to inefficient investment under the condition of all samples.(2)The older top managers are, the more effective investment will be done by them under the situation of earnings management during the prior period, while the correlation is significant only happens in low level of earnings management; on the other hand, when the top managers are young, earnings management is directly proportion to inefficient investment. (3)Negative correlation between ratio of male top managers in listed companies and low level of earnings management is significant. (4)Earnings management is directly proportion to inefficient investment after controlling the variable of executive education; when the executive education is relatively low, top managers can not realize the disadvantage brought by earnings management in time which leads to inefficient investment.(5) Top managers’ tenure is significantly positively relevant to inefficient investment; secondly, in the companies which is controlled by long-tenure top managers, the earnings management is directly proportion to inefficient investment.At last, the paper makes suggestion from the internal and external, as well as in the level of government and enterprise.