Research On The Influence Of Institutional Investors And Internal Control On Earnings Management

With the rapid development of stock market, earnings management and deficiencies in internal control also have appeared seriously disrupted the market order and damaged to information users. In order to solve the problems, the domestic and foreign scholars have done a lot of discussion and study, while the study from the perspective of institutional investors is hardly involved at home and abroad. This paper selects 2010--2014 A-share listed companies in Shanghai and Shenzhen as samples, and adopts normative research and empirical research method of combining.Firstly, it verify the relationship of internal control,institutional investors and earnings management. Further to institutional investors holding variable perspective, it studies the impact of investment holdings variable mechanism of internal control inhibition earnings management The result shows that effective internal control can restrict earnings management;the proportion of institutional investors holding can effectively improve the quality of internal control, and has a positive role in promoting internal control restrict earnings management behavior.The impact of “Pressure-resistant type”is stronger than “Pressure-sensitive type”. Further study found that compared to non-state enterprises, state-holding enterprises weakened the influence of institutional investors on the internal control inhibition earnings management behavior. To test the accuracy and reliability of the results, this paper has used accruals earnings management and real earnings management activities as the dependent variable to conduct soundness tests which results consistent with above. Finally, the paper makes suggestions to listed companies, combining with the research results and practical experience.